Question on: JAMB Economics - 2022
If the government imposes a minimum price on a commodity
A
market surplus occurs
B
the market will be cleared in the short-run
C
excess demand occurs
D
government regulation is no longer needed
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Correct Option: A
Option A is the correct answer.
The government often sets a minimum price, also known as a price floor, to protect the producer or seller. This minimum price is established above the equilibrium price, resulting in a surplus of goods as the supply exceeds the demand.
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