Using a diagram, explain what is meant by minimum and maximum prices
- A minimum price is a price set by the government above equilibrium price below which it is illegal to sell or by a commodity. It is meant to protect producers against exploitation by the consumers. When the government fixes Pmin above PC the demand falls to Q1 while the supply rises to Q2 hence this creates surplus.
- Maximum is the a price set by the government below equilibrium price above which it is illigal to sell or by a commodity. It is meant to protect customers against exploitation by the producer. When the government fixes Pmax below PC the demand falls to Q2 while the supply falls to Q1 hence this creates excess demand.
CATEGORIES Economics
TAGS Dr. Bbosa Science
Iam interested sir
I just couldn’t depart your site before suggesting that I extremely enjoyed the standard info a person provide for your visitors? Is going to be back often in order to check up on new posts
Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something I think that you could do with a few pics to drive the message home a little bit, but instead of that, this is excellent blog A great read I’ll certainly be back