A system of quotas will result in higher incomes for farmers if:
A) the government purchases any excess supply.
B) production costs can also be reduced.
C) the demand for farm products is inelastic.
D) government price supports remain in effect.

Question

Quizplus · Accepted Answer

If the demand for farm products is inelastic, a system of quotas will limit supply, potentially increasing prices and resulting in higher incomes for farmers.

A System of Quotas Will Result in Higher Incomes for Farmers