| Price (₦) |
Quantity Demanded |
| 8 | 10 |
| 6 | 12 |
If we move from 8 to 6, the elasticity of demand is_______
- -1.25
- 0.62
-
0.8
- 1
The correct answer is: C
Explanation
The elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price.
%Change in quantity = 12 - 10 = 2
Percentage change = \(\frac{2}{10}\) = 0.2
Change in price = 8 - 6 = 2
Percentage change = \(\frac{2}{8}\) = 0.25
Elasticity of demand = \(\frac{0.2}{0.25}\) = 0.8