Suppose 100 bushels of X are produced at a target price of $7 per bushel,but consumers will only buy 100 bushels at $3 a bushel.What is the total deficiency payment to farmers?
A)$400
B)$600
C)$300
D)$100

Question

Quizplus · Accepted Answer

The deficiency payment is the difference between the target price and the market price, multiplied by the quantity produced. In this case, the deficiency payment is ($7 - $3) * 100 = $400.

Suppose 100 Bushels of X Are Produced at a Target