-Which of the following is true regarding a price support set above the equilibrium price? i. The price support increases the price consumers pay.
Ii) The price support creates a deadweight loss.
Iii) The price support decreases output.
A) i only
B) i and ii
C) iii only
D) i, ii and iii
E) i and iii

Question

-Which of the following is true regarding a price support set above the equilibrium price? i. The price support increases the price consumers pay.
Ii) The price support creates a deadweight loss.
Iii) The price support decreases output.
A) i only 
B) i and ii 
C) iii only 
D) i, ii and iii 
E) i and iii

Quizplus · Accepted Answer

Price supports set above the equilibrium price increase the price consumers pay and create a deadweight loss due to inefficient allocation of resources. However, they do not necessarily decrease output; instead, they can lead to surplus production.

-Which of the Following Is True Regarding a Price Support