Maximum Prices.

All sorts of fun to be had with this kind of price intervention.  The rationale behind the introduction of a price ceiling is to make certain goods, deemed to possess significant external benefits affordable to those lacking effective demand. This in itself requires a normative judgement and can indeed result in a loss of economic and social welfare and government failure.  Good practice to develop your chains of analysis and evaluation skills as well as honing in on your diagrams.

thanks tutor2u

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