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

Maximum and minimum prices — practice question

To avoid producing too much milk, every milk producer is allocated a production quota that states the quantity of milk he may supply. At first, these quotas cannot be traded, but later trading in quotas is permitted. Who would benefit or be disadvantaged when trading in quotas occurs?

  • Apurchasers of quotas: gain; sellers of quotas: gain
  • Bpurchasers of quotas: gain; sellers of quotas: lose
  • Cpurchasers of quotas: lose; sellers of quotas: gain
  • Dpurchasers of quotas: lose; sellers of quotas: lose

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