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

Maximum and minimum prices — practice question

From the diagram, D represents the demand curve for an agricultural commodity, while S1 shows the original supply curve. The government implements a buffer scheme to keep farm incomes at their starting level. If a bumper harvest shifts the supply curve to S2, what quantity would the government have to purchase from the farmers to add to the buffer stock?

  • A1000 tonnes
  • B2000 tonnes
  • C3000 tonnes
  • D4000 tonnes

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