Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

Following several bad harvests, a government sets an effective maximum price for cereals. What would be a consequence of this policy?

  • ABoth rich and poor people would satisfy their demands equally.
  • BIllegal buying and selling through a black market would be prevented.
  • CRationing would be necessary to ensure a fair distribution of cereals.
  • DThe market would fail to clear leaving a surplus of cereals.

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