Economics 9708 · AS & A Level · Government intervention in markets

Government intervention in markets — practice question

The government sets a maximum price for electricity. Which statement explaining this policy could be regarded as valid on economic grounds?

  • AIt will encourage electricity suppliers to invest in additional capacity.
  • BIt will increase the incentive for consumers to conserve energy.
  • CIt will prevent the monopolistic exploitation of consumers.
  • DIt will prevent the rationing of electricity through power cuts.

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI