JAMB Economics 2014 Objective — Question 15

Question 15 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2014 Objective paper, with the correct answer and a full explanation.

When price is set below equilibrium, this will lead to

A. a fall in price
B. an increase in the quantity supplied
C. a new equilibrium
D. a decrease in the quantity suppliedCorrect

Explanation

When price is set below equilibrium, the quantity supplied will fall, obeying the law of demand and supply, which states that the lower the price, the lower the quantity supplied.

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