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

Maximum and minimum prices — practice question

A government steps in within the market for good X. It sets a minimum price above the market equilibrium. Which circumstance would account for the government doing this?

  • Agood X: demerit good; reason for intervention: to decrease consumption
  • Bgood X: demerit good; reason for intervention: to increase consumption
  • Cgood X: merit good; reason for intervention: to decrease consumption
  • Dgood X: merit good; reason for intervention: to increase consumption

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