reduce supply
increase supply
reduce demand and create surplus
increase demand and create scarcity
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Discussions (4)
Minimum price legislation is used when the price of goods is falling in order to make it rise we use the price floor.
Since price increase there will be an increase in quantity supplied but on the consumer hand increase in price will lead to less quantity demanded. More supply than demand = surplus
B and C is the answer but C is most appropriate
minimum price control is when government sets price above the equilibrium market price. The higher the price, the higher the quantity supplied and lower the quantity demanded ceteris paribus. Therefore, the correct answer is B and C NOT D. Please correct this
the correct answer is C because a price floor leads to more supply by producers which leads to higher prices, thereby reducing demand and creating excess supply
To prevent prices from falling further, the government may adopt “minimum price legislation” to protect the interests of farmers or producers, ... Because of the legal stipulation of price, neither buyers nor sellers dare enough to raise the price to eliminate excess demand. So, excess demand in the market would stay.
