Economics A Level: What happens if a Price Minimum is Set
1. Above the Price Equilibrium
2. Below the Price Equilibrium

Question

What happens if a Price Minimum is Set
1. Above the Price Equilibrium 
2. Below the Price Equilibrium

go kys · Accepted Answer

1. Setting it Above will lead to an Excess Supply situation where Demand is much Less. The Government, to avoid the Stockpiling of the Excess Supply, will have to Buy it at the Minimum Price. 
2. This will lead to Nothing

Economics A Level

What happens if a Price Minimum is Set 1. Above the Price Equilibrium 2. Below the Price Equilibrium

1. Setting it Above will lead to an Excess Supply situation where Demand is much Less. The Government, to avoid the Stockpiling of the Excess Supply, will have to Buy it at the Minimum Price. 2. This will lead to Nothing

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