In the diagram above, there is an excess

  • A demand for 30 units
  • B supply of 40 units
  • C demand for 20 units
  • D supply of 20 units
jamb 2008economics

The correct answer is B. supply of 40 units

Excess demand occured when 40 units were supplied. This is because, at this point, the demand was the same as at when 20 units was supplied. Therefore supplying 40 units when the maximum demand by the market is 20, would lead to excess supply.

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