Asked by Maria Amavizca on Jun 22, 2024
Verified
A price support may be pictured by:
A) shifting the demand curve to the right by the amount of the government purchase.
B) shifting the demand curve to the left by the amount of the government purchase.
C) shifting the supply curve to the right by the amount of the government purchase.
D) shifting the supply curve to the left by the amount of the government purchase.
E) drawing a horizontal line below equilibrium price at the supported price.
Price Support
Government interventions in the market to maintain the price of a commodity at a certain level.
Demand Curve
A chart that illustrates the link between a product's price and the amount of the product that buyers are prepared and capable of buying at different price levels.
Government Purchase
The buying of goods and services by government agencies, contributing to public sector spending.
- Comprehend the fiscal consequences of governmental actions in marketplaces, including the establishment of minimum prices and financial aid for prices.
- Identify the government's function in mitigating market deficiencies and the possible implications of these measures.
Verified Answer
JC
Jenai CoombsJun 25, 2024
Final Answer :
A
Explanation :
EPrice supports can be visualized in two ways: A) by shifting the demand curve to the right, which reflects an increase in demand due to government purchases, and E) by drawing a horizontal line at the supported price level, which indicates the minimum price at which the product will be sold, regardless of the market equilibrium.
Learning Objectives
- Comprehend the fiscal consequences of governmental actions in marketplaces, including the establishment of minimum prices and financial aid for prices.
- Identify the government's function in mitigating market deficiencies and the possible implications of these measures.