Imagine the Saudi government decides to impose a legal price maximum of $1 per

kilogram (Kg) on above diagram.

a. Indicate the equilibrium price and quantity on the graph.

b. Show the price maximum on the diagram

c. Explain how much rice will be demanded and supplied following the imposition

of the price maximum.

d. Calculate the change in consumer expenditure on rice following the imposition of

the price maximum.

e. Explain two measure that the government may take to achieve their aim of giving

less expensive rice to more people.