WAEC Economics 2014 Paper

Concept:Price elasticity of supply measures the responsiveness of quantity supplied to a change in price.Explanation:Formula: $E_s = \frac{\%\Delta Q_s}{\%\Delta P}$Initial price is $10 and new price is$15.Change in price = $15 - 10 = 5$.Percentage change in price = $\frac{5}{10} \times 100 = 50\%$.Initial quantity supplied is 10 units and new quantity supplied is 15 units.Change in quantity = $15 - 10 = 5$ units.Percentage change in quantity supplied = $\frac{5}{10} \times 100 = 50\%$.So, $E_s = \frac{50\%}{50\%} = 1$.Thus, the supply is unitary elastic.Answer:C. 1.