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WAEC Economics 1993 Question 30

Question 30

Price Determination

If price falls below the equilibrium

  1. A.demand will equal supply
  2. B.demand will be greater than supply
  3. C.supply will be greater than demand
  4. D.price will become indeterminate
  5. E.quantity supplied will be zero.
Show the answer and explanation

Answer: B (demand will be greater than supply)

Explanation

Below equilibrium, more is demanded and less supplied, so demand exceeds supply (a shortage).