Assuming the equilibrium price of a 5kg bag of mealie meal is R45 Explain with aid of labelled diagrams what will happen if government
1. Fixes a minimum price of R40 for a 5kg bag of mealie meal, then nothing will change, because it is non-binding price floor.
2. Fixes a maximum price of R40 for a 5kg bag of mealie meal, then the equilibrium price will decrease to R40, the quantity demanded will increase and the quantity supplied will decrease, so there will be a shortage.
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