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BPP kit page 11 Q 4.3 A legal minum price is set below the equilibrium price what will be the impact? A excess of demand over supply B.excess of supply over demand. C.nothing. BPP answer is C -nothing Price is set Below equilibrium so as the poor consumers can afford making demand exceeds supply leading to shortage of good thats how I understood but bbp is stating different ansnwer help sir
@fatez said:
BPP kit page 11 Q 4.3 A legal minum price is set below the equilibrium price what will be the impact? A excess of demand over supply B.excess of supply over demand. C.nothing. BPP answer is C -nothing but the way i understood is that Price is set Below equilibrium so as the poor consumers can afford making demand exceeds supply leading to shortage of goodYou are confusing legal minimum and legal maximum.
If equilibrium price is 20, demand =supply. If legal minimum is 15, the price of 20 is still available for equilibrium
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