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

Maximum and minimum prices — practice question

The government sets a maximum price of P2 for a product. What will the position be after this action?

  • Aan equilibrium with price P1 and quantity Q1
  • Ban equilibrium with price P2 and a quantity between Q2 and Q3
  • Can oversupply in the market by Q2Q3
  • Da shortage in the market of Q2Q3

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