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Governments occasionally set minimum prices above the market-clearing rate (e.g. alcohol price regulation, minimum wages, farm price supports). (a)State the supply and demand conditions (if
Governments occasionally set minimum prices above the market-clearing rate (e.g. alcohol price regulation, minimum wages, farm price supports).
- (a)State the supply and demand conditions (if any) under which a minimum price can increase consumer surplus. Support your answer with graphs.
- (b)State the supply and demand conditions (if any) under which a minimum price can decreaseseller 's aggregate revenue, support the answer with graphs .
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