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WAEC Economics 2011 Question 11

Question 11

Price Determination

Price fixed above the equilibrium is to

  1. A.protect agricultural producers.
  2. B.discourage agricultural producers.
  3. C.lower the prices of agricultural produce.
  4. D.favour consumers.
Show the answer and explanation

Answer: A (protect agricultural producers.)

Explanation

A minimum (floor) price above equilibrium guarantees producers a good price.