Suppose that an increase in the global demand for corn has pushed the equilibrium price of corn above the government's support price. Which of the following would be true?
A)price would stay at the support price and government would not buy any corn.
B)quantity supplied would equal quantity demanded.
C)quantity supplied would be greater than quantity demanded and the government would buy more corn.
D)quantity supplied would be less than quantity demanded and the government would have to sell corn.

Question

Quizplus · Accepted Answer

An increase in global demand for corn has pushed the equilibrium price of corn above the government's support price. This means that the market price is higher than the support price set by the government. In this case, the quantity supplied would equal quantity demanded since the market is already at equilibrium. There is no reason for the government to intervene in the market since the market is functioning efficiently. Therefore, the correct answer is B.

Suppose That an Increase in the Global Demand for Corn