Categories: Economics WAEC

If a beef market is in equilibrium at $4.00 per kg; an increase in price to $6.00 per kg may cause

A. surplus in the market
B. shortage in the in market
C. black market to come into operation
D. rationing to be introduced

Correct Answer:

Option A = surplus in the market

Explanation

When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result.

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