If the quantity supplied of yam increases from 400 to 500 bags when the price rises from ₦2,000 to ₦2,500 per bag, the price elasticity of supply is
A0.5
B1.0CORRECT
C1.5
D2.0
GCEEconomicsDemand and Supply2020
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Price elasticity of supply (PES) = (% change in quantity supplied) ÷ (% change in price). % change in quantity supplied = (100/400) × 100 = 25%. % change in price = (500/2000) × 100 = 25%. Therefore PES = 25% ÷ 25% = 1.0, indicating unit elastic supply.
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