JAMB - Economics (1978 - No. 1)
Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00, the supply will be
The same as equilibrium supply
Greater than equilibrium supply
Less than the equilibrium supply
Determined later by government
None of these
Explicació
If the market price is below the equilibrium price, quantity supplied is less than quantity demanded, creating a shortage. The market is not clear. It is in shortage. Market price will rise because of this shortage.