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WAEC Economics 2006 Question 19

Question 19

Price Determination

The mechanism which allows the price of a commodity to be fixed either above or below the equilibrium is known as

  1. A.monopolistic competition
  2. B.price discrimination
  3. C.perfect competitive market
  4. D.price control.
Show the answer and explanation

Answer: D (price control.)

Explanation

Price control is government fixing a maximum price (below equilibrium) or minimum price (above equilibrium).