WAEC Economics 2021 Paper

Concept:Price elasticity of supply measures how strongly the quantity supplied reacts to a change in price.Explanation:Initial price = $\$10$.New price = $\$20$.Change in price = $\$20 - \$10 = \$10$.Percentage change in price = $\frac{10}{10} \times 100 = 100\%$.Initial quantity supplied = 50 boxes.New quantity supplied = 120 boxes.Change in quantity = $120 - 50 = 70$ boxes.Percentage change in quantity supplied = $\frac{70}{50} \times 100 = 140\%$.Price elasticity of supply $= \frac{140\%}{100\%} = 1.4$.Since $1.4 > 1$, the supply is relatively responsive to price changes.Therefore, supply is fairly elastic.Answer:C. Fairly elastic.