minimum price control

Question 1

minimum price diagram

Answer 1

Question 2

analysis diagram minimum price

Answer 2

• increase market price
• new supply curve

excess supply

new equilibrium

Question 3

advantages of minimum pricing

Answer 3

• encourage willingness to supply
• ensures min. price for suppliers

Question 4

disadvantages of minimum pricing

Answer 4

• QT decrease
• Opportunity cost
• could lead to govt failure.