Economics JAMB

In order to reduce hardship faced by consumers due to high prices government can introduce?

A. maximum prices
B. commodity boards
C. minimum prices
D. price control boards

Correct Answer:

Option A – maximum prices

Explanation

Price controls are government-mandated minimum or maximum prices that can be charged for specified goods.

The government would normally fix a maximum price at which goods are to be sold. Maximum prices can reduce the price of food to make it more affordable to the citizens and reduce hardship and exploitation from sellers. But the problem is a maximum price may lead to lower supply and a shortage.

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