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JAMB Economics 1988 Question 19

Question 19

Price Determination

If in the demand-supply diagram above, the quantity supplied is OQ, then

Diagram for this question
  1. A.price will be OP
  2. B.there will be excess demand of RT
  3. C.price will be ON
  4. D.price will tend to rise.
Show the answer and explanation

Answer: C (price will be ON)

Explanation

At quantity OQ the demand curve is at point T, so buyers will take the whole quantity OQ only at price ON.