WAEC Economics 2022 Objective — Question 15

Question 15 of 50 from the West African Examinations Council (WAEC) Economics 2022 Objective paper, with the correct answer and a full explanation.

If the government imposes a minimum price on a commodity

A. a market surplus occursCorrect
B. the market will be cleared in the short-run
C. excess demand occurs
D. government regulation is no longer needed

Explanation

A minimum price is usually set above the equilibrium price. This causes excess supply (a market surplus), since suppliers are willing to supply more at a higher price than consumers are willing to buy.

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