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WAEC Economics 2022 Question 15

Question 15

Price Determination

If the government imposes a minimum price on a commodity

  1. A.market surplus occurs
  2. B.the market will be cleared in the short-run
  3. C.excess demand occurs
  4. D.government regulation is no longer needed
Show the answer and explanation

Answer: A (market surplus occurs)

Explanation

A minimum price above equilibrium creates a surplus.