price controls (min/max) and market failure

Question 1

min price and market failure

Answer 1

-discoruages consumption of demerit goods (min price in Scotland and Canada)
-increases the price to resolve overproduction/consumption (d contracts)
-externality internalised
-allocative efficient and welfare max

Question 2

issues with minimum pricing

Answer 2

-inelastic demand
-regressive
-black markets
-unintended consequences

Question 3

maximum pricing and resolving market failure

Answer 3

-resolves underconsumption of essential goods and services
-lowers price for more affordability
-extension of demand

Question 4

maximum pricing unintended consequences

Answer 4

-shortage
-enforcement
-cost
-setting right level
-black markets