Question 2 (Marks: 20) Q.2.1 When government fixes a minimum price (i.e., a price floor) above the equilibrium (5) price, it creates a market surplus. Explain how the government can eliminate this market surplus when additional intervention is required. Q.2.2 Price floors that are set above the equilibrium price are regarded as an inefficient (2) way of assisting small or poor producers. Suggest a better way that government can assist poor producers and explain why your suggestion is an improvement on the implementation of a price floor. Q.2.3 Explain, with the aid of a graph, the welfare costs (i.e., the effect on consumer and (10) producer surplus) of fixing a maximum price below the equilibrium price. (Note: Five marks for the graph and five marks for the explanation of the graph) Q.2.4 Describe three factors that could increase the supply of potatoes (assuming the (3) market mechanism is fully operational, and demand and supply can freely respond to changes in the market)