Gce Model Questions Vol1 2024 Economics Question 3

Practice objective / multiple choice question 3 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Easy Difficulty
Question 3 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

The demand for a good is given by \( Q = 500 - 5P \), where \( Q \) is quantity demanded and \( P \) is price (in naira). If the price rises from \( P = 40 \) to \( P = 45 \), calculate the price elasticity of demand using the midpoint formula and state whether demand is elastic, inelastic or unit‑elastic.

Answer Options

A. Elasticity ≈ -0.45; demand is inelastic
B. Elasticity ≈ -1.00; demand is unit‑elastic
C. Elasticity ≈ -1.20; demand is elastic
Correct Answer D. Elasticity ≈ -0.74; demand is inelastic
Correct Answer
D
Correct Option:
Elasticity ≈ -0.74; demand is inelastic

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 3. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Easy .

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