Friday, July 06, 2007

Unit 1: Maximum prices and disequilibrium: Zimbabwe

This BBC article clearly shows what happens if the government steps in and sets a maximum price below the free market equilibrium

http://www.guardian.co.uk/frontpage/story/0,,2119003,00.html

a) Draw a diagram to show what is happening with the introduction of maximum prices
b) Using the diagram and the article, explain what is happening in Zimbabwe

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