If the equilibrium price of a certain commodity is N120.00 and the government fixed its price at N110.00, the supply will be?
Answer Details
If the government fixed the price of a commodity below the equilibrium price, i.e., N110.00 < N120.00, then the quantity supplied by producers will be smaller than the equilibrium quantity because the producers will be unwilling to produce and supply the commodity at a price lower than what they would get in the equilibrium. Therefore, the correct option is "smaller than the equilibrium supply".