A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2022 · Q151 Mark
The demand and supply functions for a product are quantity demanded = 1500 + 50P and quantity supplied = 300P – 2000 where P = price. With government regulation, the current price in the market is $15. What can be concluded about the form of price regulation and the balance of demand and supply in the market?
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Aform of price regulation: effective maximum price, balance of demand and supply: excess demand
Bform of price regulation: effective maximum price, balance of demand and supply: excess supply
Cform of price regulation: effective minimum price, balance of demand and supply: excess demand
Dform of price regulation: effective minimum price, balance of demand and supply: excess supply
✓ Correct answer
D: form of price regulation: effective minimum price, balance of demand and supply: excess supply
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