Price Ceiling Increases Quantity Demanded for Eye Tests

Steps:

• Identify market equilibrium quantity of eye tests at Q1 under free market conditions.
• Evaluate how a maximum price (ceiling) at P4, if below equilibrium, affects consumer behavior.
• Apply the law of demand: lower price increases quantity demanded to Q2.
• Confirm the policy targets affordability to expand access without shifting curves.

Why D is correct:

• A maximum price ceiling below equilibrium reduces the price paid by consumers, increasing quantity demanded along the demand curve to Q2.

Why the others are wrong:

• A: Minimum price above equilibrium raises price, decreasing quantity demanded below Q1.
• B: Subsidy of P2 to opticians shifts supply right but insufficiently to reach Q2.
• C: Subsidy of P3 to opticians shifts supply further right, potentially exceeding Q2 or altering price differently.

Final answer: D