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WAEC Economics 1991 (August) Question 7

Question 7

Price Determination

Use the diagram to answer this question.
In the diagram above, the equilibrium price is

Diagram for this question
  1. A.OQo
  2. B.OQo
  3. C.P1Po
  4. D.PoP2
  5. E.OPo
Show the answer and explanation

Answer: E (OPo)

Explanation

Equilibrium is where the demand curve D crosses the supply curve S; reading across to the price axis gives OPo. OQo is the equilibrium quantity.