A government fixes a maximum price for a product in order to increase its consumption.
What would be the likely outcome of such a policy?
1 )
Consumption will fall if the maximum price is above the current equilibrium price.
2 )
Consumption will rise if the maximum price is below the current equilibrium price.
3 )
Production will fall if the maximum price is above the current equilibrium price.
Production will fall if the maximum price is below the current equilibrium price.
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