(Solved): 7 The diagram below shows the demand and supply for a demerit good In order t ...

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7 The diagram below shows the demand and supply for a demerit good In order to encourage the consumption of the good, the government imposes a minimum price of \( \mathrm{P} 2 \). As a consequence, in the market for the good (a) the price will remain unchanged at \( \mathrm{P} 1 \). (b) there will be excess supply of \( \mathrm{Qa}-\mathrm{Qb} \) (c) supply will rise. (d) quantity demanded will rise from Qa to Qb.