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

Maximum and minimum prices — practice question

In which situation would the government be least likely to provide a product directly?

  • Awhen fixed costs are very high
  • Bwhen the demand for the product is very high but unit costs are low
  • Cwhen the industry faces large natural barriers to entry
  • Dwhen the minimum efficient scale of production is above the level of demand at current prices

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