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

Maximum and minimum prices — practice question

The equilibrium price of a product is $10. The government sets an effective minimum price of $12 for the product. In which condition will the producer surplus rise by the greatest amount?

  • Aprice elasticity of demand 0
  • Bprice elasticity of demand between 0 and 1
  • Cprice elasticity of demand 1
  • Dprice elasticity of demand greater than 1

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