A-LevelEconomicsGovernment microeconomic intervention9708/12 · Oct/Nov 2010 · Q181 Mark
In the diagram, S₁S₁ and DD represent the original supply and demand curves for an agricultural product. [Figure 18.1] Bad weather then reduces supply to S₂S₂. The government does not allow the price to rise above OP₁. How much of the product will the government have to supply from stocks if the price is to be maintained at OP₁?
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.
AOQ₃
BQ₁Q₃
CQ₁Q₂
DQ₂Q₃
✓ Correct answer
B: Q₁Q₃
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