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

Maximum and minimum prices — practice question

The diagram illustrates a market in which the government has fixed a minimum price at OM. What conclusion can be drawn from the diagram?

  • AAt prices above OM, there would be a surplus of the good.
  • BAt the minimum price OM, there would be a shortage of the good.
  • CPrice will fall automatically from OM to OP.
  • DThe minimum price will be ineffective.

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