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JAMB Economics 2006 Question 18

Question 18

Price Determination

Given that demand and price remain unchanged, an outward shift of the supply curve will lead to

  1. A.hoarding
  2. B.excess supply
  3. C.excess demand
  4. D.a black market
Show the answer and explanation

Answer: B (excess supply)

Explanation

More is offered for sale at the same price while demand stays the same, so quantity supplied exceeds quantity demanded.