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WAEC Economics 2008 Question 8

Question 8

Price Determination

The gap between demand and supply curves above the equilibrium price is

  1. A.normal demand
  2. B.excess supply
  3. C.equilibrium quantity
  4. D.abnormal demand.
Show the answer and explanation

Answer: B (excess supply)

Explanation

Above equilibrium price, quantity supplied exceeds quantity demanded: excess supply.