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JAMB Economics 2004 Question 46

Question 46

Price Determination

Use the diagram above to answer this question. A movement from M to T implies that there has been

Diagram for this question
  1. A.a decrease in supply
  2. B.an increase in demand
  3. C.a decrease in price
  4. D.an increase in price
Show the answer and explanation

Answer: D (an increase in price)

Explanation

Use the diagram. M and T are on the same supply curve S1, and T is higher, so the move along the curve is caused by an increase in price.