Economics (AS & A Level) · Oct / Nov 2025 · Paper 13 · Question 16

9708Methods and effects of government intervention in markets

A government intervenes in the market for good X. It fixes a minimum price above the market equilibrium. Which situation explains why the government would do this?

Ademerit good — to decrease consumption
Bdemerit good — to increase consumption
Cmerit good — to decrease consumption
Dmerit good — to increase consumption

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Correct answer: A. demerit good — to decrease consumption

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