From the graph above P2 in price control situation is referred
Answer Details
The graph is not visible, but assuming a standard supply and demand graph, if there is a price control in place, the term "P2" could refer to either the maximum price or the minimum price, depending on the type of price control.
If the price control is a price ceiling, then P2 would refer to the maximum price that sellers are allowed to charge. This would be a price that is below the equilibrium price, causing a shortage of the product because quantity demanded exceeds quantity supplied.
If the price control is a price floor, then P2 would refer to the minimum price that buyers are required to pay. This would be a price that is above the equilibrium price, causing a surplus of the product because quantity supplied exceeds quantity demanded.
It's important to note that price controls can have unintended consequences and may not always achieve their desired outcomes. For example, a price ceiling may result in shortages and black markets, while a price floor may lead to surpluses and wasteful production.
