Use the information below to answer this question.

Given that Q d = 20 - 4P and Qs = 6P + 12

If price is increased to N3, how much is the excess supply?

  • A 30
  • B 22
  • C 12
  • D 8
jamb 2008economics

The correct answer is B. 22

Given that Qd = 20 - 4P and Qs = 6P + 12

To solve for excess supply, we will have to substitute '3p'' into both sides of the equation. Hence we have;

Qd = 20 - 4(3) and Qs = 6(3) + 12

20 - 12 = 8

18 + 12 = 30

30 - 8 = 22

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