The price of soap rose from $10 to$20 causing a trader to increase her supply from 50 to 120 boxes per week. This makes supply_________

Analyze the question: We need the price elasticity of supply (PES) when price rises from 10 to 20 and quantity supplied rises from 50 to 120.

Concept: PES = % change in quantity supplied ÷ % change in price

• PES > 1: elastic
• PES = 1: unitary elastic
• PES < 1: inelastic
• PES = 0: perfectly inelastic

Solution (using the simple/original-base method used in WASSCE):

1. % change in quantity supplied = (120 − 50) / 50 × 100 = 70/50 × 100 = 140%
2. % change in price = (20 − 10) / 10 × 100 = 100%
3. PES = 140 / 100 = 1.4

(Using the midpoint method gives: 70/85 ÷ 10/15 = 0.8235 ÷ 0.6667 ≈ 1.24, which is also greater than 1, so the conclusion is the same.)

Interpretation: PES = 1.4 is greater than 1, so supply is elastic. Quantity supplied responds more than proportionately to the price change. Among the options, "fairly elastic" is the one that describes elasticity greater than 1 (but not infinite).

• A (Unitary) would need PES = 1. ✗
• B (Perfectly inelastic) would need PES = 0. ✗
• D (Inelastic) would need PES < 1. ✗
• C (Fairly elastic) matches PES > 1. ✓

Exam tip: Always compute PES first and compare to 1. Greater than 1 means elastic ("fairly elastic" in WASSCE wording), less than 1 means inelastic. Remember: if the percentage change in quantity is bigger than the percentage change in price, it is elastic.