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JAMB Economics 1997 Question 20

Question 20

Price Determination

From the diagram above, the quantity of output is determined by the point

Diagram for this question
  1. A.M
  2. B.N
  3. C.H
  4. D.F.
Show the answer and explanation

Answer: C (H)

Explanation

Equilibrium output is where the demand curve DD meets the supply curve S0, at point H, giving quantity Q0. Demand is vertical, so output stays at Q0 even when supply shifts.