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WAEC Economics 2019 Question 16

Question 16

Price Determination

What happens when a minimum price is imposed in a market?

  1. A.Shortage occurs.
  2. B.Surplus occurs
  3. C.The market maintains its equilibrium
  4. D.Many firms will close down
Show the answer and explanation

Answer: B (Surplus occurs)

Explanation

A minimum price above equilibrium creates a surplus.