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JAMB Economics 1999 Question 9

Question 9

Price Determination

D0 and S0 are initial demand and supply curves with equilibrium at E1. Other supply and demand curves with equilibra points are indicated.
Points E6 and E5 are respectively equilibra points for

Diagram for this question
  1. A.D0 and S0; D0 and S2
  2. B.D1 and S2; D2 and S0
  3. C.D2 and S1; D2 and S2
  4. D.D2 and S0; D0 and S2.
Show the answer and explanation

Answer: C (D2 and S1; D2 and S2)

Explanation

E6 is where the highest demand curve D2 crosses the leftmost supply curve S1. Following D2 to the right, it crosses S2 at E5.