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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 (145)

Divinest
2 years 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
3 years ago
itz c because the seller wil not wnt to sell at low price
Hismajesty
2 months ago
Equilibrium price is the price which favours both supplies and demands in other words suppliers and demanders. Both are willing to supply and demand. When the Government reduces the price from equilibrium price, it will only favour demand/demanders and not supply/suppliers so they will automatically reduce supply
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
9 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
5 years ago
D ans is c
Enobong ebie
2 years 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
4 years ago
the answer is C
Sensibility55
2 years ago
The answer is "c" becos has govt change the price it affect the law of equilibrium.
aderibigbewale
3 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
4 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)
  • Davenport J Smith: the correct answer is C because in economics supply will increase only when when there is an increase in price which will increase the profit margin of the producer but when there is decrease in price the producer will not supply more commodity at large
    Like 0    Dislike 0   2 days ago

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