Diagram Flashcards
1
Q
Where is price floor and price ceiling and who for (2)
A
Price ceiling above MP = protects consumer
Price floor = below MP = protects producer
2
Q
When supply shifts out what (2)
A
Gov (or…) buy given quantity to drive up price
Price must stay within range of p1 and p2
3
Q
What if demand shifts
A
Sell stock = brings price down
4
Q
Example specific (2)
A
New Delhi in India
Flour stockpiles sold to reduce price
5
Q
What does buffer stocks assume
A
Assumes BS interventions are effective enough to chnage the market price
