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JAMB Economics 2008 Question 16

Question 16

Price Determination

Use the information below to answer questions 15 and 16. Given that Qd = 20 − 4P and Qs = 6P + 12.
If price is increased to ₦3, how much is the excess supply?

  1. A.30
  2. B.22
  3. C.12
  4. D.8
Show the answer and explanation

Answer: B (22)

Explanation

At P = 3: Qd = 20 − 12 = 8 and Qs = 18 + 12 = 30, so excess supply = 30 − 8 = 22.