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

Maximum and minimum prices — practice question

A market is initially in equilibrium, with 100 units of the product being sold at a price of US$10 each. The price elasticity of supply for the product is +2.0 and the price elasticity of demand is –1.0. What will be the condition of the market if a minimum price of US$11 is introduced?

  • Aan excess demand of 10 units
  • Ban excess demand of 30 units
  • Can excess supply of 20 units
  • Dan excess supply of 30 units

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