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If the government imposes a minimum price on a commodity

Economics
JAMB 2022

If the government imposes a minimum price on a commodity

  • A. market surplus occurs
  • B. the market will be cleared in the short-run
  • C. excess demand occurs
  • D. government regulation is no longer needed
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Correct Answer: Option A
Explanation

Minimum price is often called price floor and it is fixed by the government to protect the producer or seller. Minimum price is set above the equilibrium price and when this occur, there will be excess supply over demand i.e surplus.


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
NECO June/July 2024 - Get offline past questions & answers - Download objective & theory, all in one app 48789
Join your school's WhatsApp group
Join your school's WhatsApp group
NECO June/July 2024 - Get offline past questions & answers - Download objective & theory, all in one app 48789
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts