JAMB Economics 2011 Objective — Question 15

Question 15 of 49 from the Joint Admissions and Matriculation Board (JAMB) Economics 2011 Objective paper, with the correct answer and a full explanation.

Minimum price legislation by government will

A. A. increase supply
B. B. reduce demand and create surplusCorrect
C. C. increase demand and create scarcity
D. D. reduce supply

Explanation

Minimum price legislation occurs when the price is fixed above equilibrium price. This will increase supply and create a supply surplus (reducing demand and creating surplus).

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