Y1 19 Min price Flashcards
1
Q
What is the intention of a minimum price
A
To protect producers from price volatility, guaranteed minimum income, solve market failure
2
Q
Min price effects in market
A
Demand contracts, supply expansion, excess supply creation, deadweight loss
3
Q
Minimum price pros
A
Producer revenue increase,producers stay in market, producer protection, market saving
4
Q
Minimum price cons
A
Higher prices, consumer surplus lower, quantity + choice + affordability lower, regressive, cost of intervention buying -> tax raise, black market
