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A Level Economics:

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Sir what will producers do if there is a shortage because of maximum price limit?? Will supply be increased or not?
Nope, they'd never increase the supply. There would be shortage if the maximum price is imposed below the market clearing price. In case this happens, the government can either provide subsidy to the producers so that they increase the supply or provide the goods from buffer stock management.
 
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Nope, they'd never increase the supply. There would be shortage if the maximum price is imposed below the market clearing price. In case this happens, the government can either provide subsidy to the producers so that they increase the supply or provide the goods from buffer stock management.
Ah thought so, that means i messed up my 12 marks answer in exam... i was in a hurry to complete the paper :/
half of the question i answered correctly, and in the end also mentioned about supply increasing to reduce shortage.
But in the middle instead of writing the gov will give subsidy i wrote producers will increase the supply. :(
Do think i can still get marks for the graph showing increase in supply to solve shortage?
or will there be no marks counted from my mistake onwards?
 
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Ah thought so, that means i messed up my 12 marks answer in exam... i was in a hurry to complete the paper :/
half of the question i answered correctly, and in the end also mentioned about supply increasing to reduce shortage.
But in the middle instead of writing the gov will give subsidy i wrote producers will increase. :(


its okay yaa
u have rest 38 marks naa
don't worry
 
Messages
8,392
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9,461
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573
Ah thought so, that means i messed up my 12 marks answer in exam... i was in a hurry to complete the paper :/
half of the question i answered correctly, and in the end also mentioned about supply increasing to reduce shortage.
But in the middle instead of writing the gov will give subsidy i wrote producers will increase the supply. :(
Do think i can still get marks for the graph showing increase in supply to solve shortage?
or will there be no marks counted from my mistake onwards?
You'd get marks for showing that suppliers would increase their supply but examiners would deduct your marks for not writing why they would increase the supply. In case if suppliers increase the supply, it would mean that price of a product would fall. Why would any rational supplier want that? :p
 
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You'd get marks for showing that suppliers would increase supply but examiners would deduct marks for writing why they would increase the supply. In case if suppliers increase the supply, it would mean that price of a product would fall. Why would any rational supplier want that? :p
Yes this was the first thing I thought as soon as I left exam hall "why did I write the producers will I increase supply? Shoot!,
But I hope I get marks for showing the graph of increased supply and the conclusion
 
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