A-LevelEconomicsGovernment microeconomic intervention9708/12 · Oct/Nov 2020 · Q161 Mark
In year 1, in the market for a good represented in the diagram, the initial demand and supply conditions are shown by D₁ and S₁, and the government has set a maximum price of OP2. In year 2, demand increases to D2, but there are no other changes to the conditions of supply or to the maximum price. Which row accurately shows the price and quantity in the market in each year?
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.
Ayear 1: price OP2, quantity OQ1; year 2: price OP1, quantity OQ4
Byear 1: price OP2, quantity OQ3; year 2: price OP2, quantity OQ5
Cyear 1: price OP3, quantity OQ2; year 2: price OP1, quantity OQ4
Dyear 1: price OP3, quantity OQ2; year 2: price OP2, quantity OQ3
✓ Correct answer
D: year 1: price OP3, quantity OQ2; year 2: price OP2, quantity OQ3
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