Learning objectives
Explain why a maximum price only takes effect below equilibrium and analyse the resulting shortage, rationing, black markets and quality effects
Explain why a minimum price only takes effect above equilibrium and analyse the resulting surplus and what the government does with it
Calculate the size of a shortage or surplus, and the cost to government of buying a surplus, from demand and supply equations
Evaluate maximum and minimum prices in markets such as rented housing, staple foods, agriculture and alcohol
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