The BBC reports that the Government in Zimbabwe is to cut the price of basics in half to counter their rampant runaway inflation
http://news.bbc.co.uk/1/hi/business/6240636.stm
A video report can be seen at
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6240000/newsid_6243600?redirect=6243694.stm&news=1&nbwm=1&nbram=1&bbram=1&bbwm=1 >
a) Draw a S&D diagram to show the effect of this maximum price on one of the listed items
b) Explain the likely consequences in this product market: How will consumers react? What will producers do? What will be the consequences for consumers in the market?
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