Question

Analyse in detail with the aid of graph maximum prices as a method of government intervention​

Answer 1

Explanation:

A maximum price occurs when a government sets a legal limit on the price of a good or service – with the aim of reducing prices below the market equilibrium price. For example, the government may set a maximum price of bread of £1 – or a maximum price of a weekly rent of £150.

1. If the maximum price is set above the equilibrium price then it will have no effect.
2. If the maximum price is set below the equilibrium price, it will cause a shortage – demand will be greater than supply.

Diagram of maximum price

Diagram of maximum pricemaximum-price^^^^^

In this diagram, the max price causes excess demand of Q2-Q1.

please mark as the brainliest

please