A-LevelEconomicsGovernment microeconomic intervention9708/12 · Oct/Nov 2009 · Q171 Mark
The government places a maximum price P₁ on an agricultural product. The supply and demand conditions for this product are shown. [Figure] What will be the outcome in the market for this product?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
AThere will be an equilibrium price and output.
BThere will be a surplus of the product.
CThere will be higher than expected profits.
DThere will be shortages of this product.
✓ Correct answer
A: There will be an equilibrium price and output.
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