1
Q
What is a minimum price with an example
A
For demerit goods which are bad for society and leaving to free market may cause harm
price is set above equilibrium to reduce consumption however it leads to excess supply
Cigarettes
2
Q
What is maximum price with an example
A
Giv intervention for merit goods which benefit society
max price set below equilibrium which creates excess demand
NHS prescription
3
Q
What does MTEC for evaluation stand for?
A
Magnitude - size of how much shifting of demand and supply
Time - long term or short term
Elasticity - responsiveness
Cetris Paribus - constant, what if?
