A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2012 · Q181 Mark
The diagram shows the market for spectacles. Initially the market equilibrium price is P₀ and quantity Q₃ is bought and sold. [Figure 18.1] The government then sets both a maximum price of Px and a minimum price of PM. What effect will these measures have on the market for spectacles?
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Acreate a shortage of spectacles equal to Q₁Q₅
Bcreate a surplus of spectacles equal to Q₂Q₄
Ccreate a surplus of spectacles equal to Q₃Q₄
Dleave the quantity bought and sold unchanged
✓ Correct answer
D: leave the quantity bought and sold unchanged
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