WAEC Economics 2019 Objective — Question 17

Question 17 of 50 from the West African Examinations Council (WAEC) Economics 2019 Objective paper, with the correct answer and a full explanation.

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

A. A shortage occurs
B. surplus occursCorrect
C. the market maintains its equilibrium
D. Many firms will close down

Explanation

A minimum price is normally set above the equilibrium price, which results in a surplus, since suppliers are willing to sell more than consumers are willing to buy at that higher price.

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