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Suppose that the equilibrium price of an article is N5.00 but the government fixes the...

Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00, the supply will be
  • A. The same as equilibrium supply
  • B. Greater than equilibrium supply
  • C. Less than the equilibrium supply
  • D. Determined later by government
  • E. None of these
Correct Answer: Option C
Explanation
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Contributions (136)

Divinest
1 year ago
I believe the answer is c because as a marketer yu go t market to make a profit so in this case instead of you make a profit you then find out that government have decreased the amount inwhich you proposed in your mine to sell the goods, so therefore you will be discouraged to supply more. Thanks
EconsKing
5 years ago
It is C becos d law of Supply states dat the Lower the Price,the lower the Quantity Supplied...therfore,since Govt reduces price below the Ep,Supply will b less dan demand..(Excess demand)This Effect is known as Maximum Price Contol...
victoria odoh
2 years ago
itz c because the seller wil not wnt to sell at low price
Peterufuoma5
6 years ago
D correct answer is C bcos no bdy is ready to sell at lost. D sellers surpose to sell at 50 wich is d eqilibrum and a gov forcefull by law reduce d price.
D-wise
1 year ago
C is correct
BENJI07
3 months ago
the law of supply states that the higher the price the higher the quantity supplied and the lower the price the lower the quantity supplied
Beniluv14
4 years ago
D ans is c
Enobong ebie
1 year ago
d ans. is c cos wen d price of a certain commodity is fixed, d less d supply and the equilibrum supply is going 2 b low also compared 2 dat of which d govt wouldn't hv intervene
JJ.Efebest
2 years ago
This question relates to the law of supply which states that the higher the price, the higher the quantity supply and the lower the price the lower the quantity supply.
beatrice chinedu
3 years ago
the answer is C
Sensibility55
1 year ago
The answer is "c" becos has govt change the price it affect the law of equilibrium.
aderibigbewale
2 years ago
The selected answer is wrong:

i think d supply will be greater dan d equlibrium supply so d answer is c
horpeyemi18
4 years ago
truly deir is somtin called minimum price legislature.it is just dat d question explain wat is ment by minimun price legislature..nd if u notice somtin d law of supply came out frm dat question.bcus d price is fall so it wil also lead to a fall in d quantity supplied.so d ans is C
Obj Emmanuel
3 years ago
for the question about the equilibrium price,the quantity supplied would decrease because at a lower price quantity supplied decreases (the 2nd law of demand)
tykebabe
5 years ago
The answer is c,its simply obey d law of supply l.e the higher d price d higher d qty dd nd vice versa

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