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WAEC Economics 1992 Question 5

Question 5

Price Determination

The equilibrium price of oranges is 50k. If for some reasons, the price rises to 60k, there will be

  1. A.excess demand
  2. B.excess supply
  3. C.shortage in the market
  4. D.many buyers in the market
  5. E.no buyer in the market.
Show the answer and explanation

Answer: B (excess supply)

Explanation

Above equilibrium, sellers offer more but buyers want less, so there is excess supply (a surplus).