Answer to Question #231445 in Microeconomics for Ewura-Esi

Question

Price controls policy from the state has led to higher spending by consumers and sharply rising prices for goods that weren't subject to price controls. The result was a big increase in demand for price-controlled goods. The state is accusing food producers, wholesalers and grocers of profiteering, threatening to seize control of supermarkets if they did not make more food available; and has instituted rationing. Predictably, "a black market developed among street vendors."

Required:

i. What is price control? With the aid of a diagram tell what type of price control the state adopted. ii. Give two reasons for price control policy. iii. Give three effects Of price control policy. why did the state threatened supermarkets? iv. Why did the policy lead to higher spending? v. Is the state justified in accusing the producers, wholesalers and grocers Of profiteering? vi. What should state do to solve the issue? vii. Is this policy "good"? viii. Three benefits of studying microeconomics

Answer 1

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