To have an effective price support program, the government must i. isolate the domestic market from the world market
Ii. pay the farmers a subsidy
Iii. introduce a price floor
A)i only
B)ii only
C)iii only
D)ii and iii
E)i, ii, and iii

Question

Quizplus · Accepted Answer

An effective price support program requires isolating the domestic market to prevent cheaper imports, paying subsidies to farmers to cover the difference between market and support prices, and introducing a price floor to ensure prices do not fall below a certain level.

To Have an Effective Price Support Program, the Government Must