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A-Level Economics · Minimum price diagram question

For a minimum price to have any effect it must be set…

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The diagram

The answer

Above the equilibrium price. A floor below the market price is like a fence below your feet — you never touch it. Floors bind from ABOVE equilibrium: they stop price falling to the market-clearing level, leaving unsold excess supply.

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This is one of 6 questions on the minimum price diagram — every corner lettered, every wrong answer diagnosed.

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