The diagram illustrates the sugar market, where it is initially in equilibrium at price OP. The government then sets a maximum price of OP1. What will happen as a result?
- Aan increase in consumer surplus equal to PRUP1
- Ba reduction in expenditure by people who still buy sugar equal to PQSP1
- Ca reduction in farmers’ receipts equal to QRML
- Dfarmers’ receipts would be PQLO