Asked by Jeremiah Antoine on Jun 19, 2024
Verified
An agricultural market price support policy establishes a binding price floor,which:
A) decreases the price paid by consumers.
B) does not change the price paid by consumers.
C) increases the price received by farmers.
D) decreases the price received by farmers.
Agricultural Market
A marketplace for the buying and selling of agricultural products, such as crops and livestock, often influenced by government policies.
Binding Price Floor
A government-imposed price control or limit that sets a minimum price above the equilibrium price, leading to surplus in the market.
Price Paid
The actual amount of money exchanged for a good or service.
- Absorb the details pertaining to price floors and their impact on the harmony of the market.
- Assess the influence of government price guarantees on the agricultural marketplace.
Verified Answer
PM
Priya MedurJun 25, 2024
Final Answer :
C
Explanation :
An agricultural market price support policy establishes a binding price floor which increases the price received by farmers. This policy guarantees a minimum price for farmers' products and helps them earn a fair income. However, it may not change the price paid by consumers as the cost of the policy may be absorbed by the government or passed on to the consumers.
Learning Objectives
- Absorb the details pertaining to price floors and their impact on the harmony of the market.
- Assess the influence of government price guarantees on the agricultural marketplace.