Asked by Brian Doherty on Jun 27, 2024
Verified
To dispose of the unwanted surplus resulting from agricultural price floors,the European Union pays exporters to sell products at a loss overseas.
Agricultural Price Floors
Government-imposed limits on how low prices can fall for agricultural products, aimed at stabilizing farmers' incomes.
Surplus
The situation in which the quantity of a good supplied exceeds the quantity demanded at a specific price.
European Union
A political and economic union of 27 European countries that participate in a single market allowing free movement of goods, services, capital, and people.
- Recognize the conditions that could result in market inefficiencies due to the imposition of price controls and quantity controls.
Verified Answer
KM
Kaelyn McGloneJul 03, 2024
Final Answer :
True
Explanation :
This is known as export subsidies and is a common practice by the EU to dispose of surplus agricultural products resulting from price floors. The subsidies help make the products more competitive in overseas markets and help farmers maintain their income despite the surplus.
Learning Objectives
- Recognize the conditions that could result in market inefficiencies due to the imposition of price controls and quantity controls.