A-LevelEconomicsThe price system and the microeconomy9708/12 · May/June 2010 · Q101 Mark
The government imposes a maximum price of P2 on a product. [Figure shows a standard demand and supply diagram with price P1 and quantity Q1 at equilibrium, and a horizontal line at P2 above P1, intersecting demand at Q2 and supply at Q3. Supply curve is S, demand curve is D. Origin is O.] What will be the position after this action?
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.
Aan equilibrium with price P₁ and quantity Q1
Ban equilibrium with price P2 and a quantity between Q2 and Q3
Can oversupply in the market by Q2Q3
Dshortage in the market of Q2Q3
✓ Correct answer
A: an equilibrium with price P₁ and quantity Q1
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill The price system and the microeconomy and see which topics are most likely to come up next.
Sign up free →