If the government imposes a minimum price on a commodity

Economics

JAMB 2022

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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If the government imposes a minimum price on a commodity

Correct Answer: Option A

Explanation

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