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WAEC Economics 2010 Question 10

Question 10

Price Determination

A decrease in supply with demand remaining unchanged will cause the equilibrium price for a good to

  1. A.be unchanged.
  2. B.remain elastic.
  3. C.remain inelastic.
  4. D.rise.
Show the answer and explanation

Answer: D (rise.)

Explanation

The supply curve shifts left, creating a shortage at the old price, so the price rises.