Economics 0455 · IGCSE · Price changes

Price changes — practice question

The diagram illustrates the equilibrium market price $P_E$ and quantity $Q_E$ for rice in a country. Which government action could make the market price of rice rise or fall to $P_1$?

  • Aencouraging the export of rice from the country
  • Bimposing a maximum price below the market price for rice
  • Cproviding a subsidy for farmers to produce more rice
  • Dreducing import tariffs on rice

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