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Market systems may not allocate resources efficiently for many reasons. This is known as market failure. Governments intervene in order to correct such market failures.

Market systems may not allocate resources efficiently for many reasons. This is known as market failure. Governments intervene in order to correct such market failures. Imposition of price controls is one of such interventions. Using relevant diagrams, discuss the use of (a) maximum prices (10) (b) minimum price controls in the markets and their consequences (10)

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