A government fixes a minimum price for a service.
What will be the outcome of such a policy?
1 )
Demand will fall if the minimum price is below the equilibrium price.
2 )
Demand will rise if the minimum price is above the equilibrium price.
3 )
Production will fall if the minimum price is above the equilibrium price.
Production will stay the same if the minimum price is below the equilibrium price.
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