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Good explanations and diagrams, thank you. Consider a market which is initially at the competitive equilibrium, and in which the government decides to intervene by

Good explanations and diagrams, thank you.

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Consider a market which is initially at the competitive equilibrium, and in which the government decides to intervene by setting a legally binding minimum price which is slightly above the competitive price. (a) What effect will this policy have on the aggregate revenue of the sellers? Support your answer with graphs showing the effect of the policy in at least two contrasting supply and demand conditions. [ Spoints] (b) What effect will this policy have on consumer surplus (Le. on welfare)? Illustrate your answer. [4 points]

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