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JAMB Economics 2009 Question 11

Question 11

Theory of Supply

A supply curve is positively sloped because

  1. A.supply always exceeds demand
  2. B.demand always exceeds supply
  3. C.price is an incentive to consumers
  4. D.price is an incentive to producers
Show the answer and explanation

Answer: D (price is an incentive to producers)

Explanation

A higher price promises more profit, so producers are encouraged to supply more.