-The above figure shows supply and demand curves for milk.In an effort to help farmers,the government passes a law that establishes a $3 per gallon price support.To maintain the price support,government must purchase
A) Q₁ gallons.
B) Q₂ gallons.
C) Q₁ - Q₂ gallons.
D) Q₂ - Q₁ gallons.

Question

-The above figure shows supply and demand curves for milk.In an effort to help farmers,the government passes a law that establishes a $3 per gallon price support.To maintain the price support,government must purchase
A) Q₁ gallons. 
B) Q₂ gallons. 
C) Q₁ - Q₂ gallons. 
D) Q₂ - Q₁ gallons.

Quizplus · Accepted Answer

The government must purchase the surplus, which is the difference between the quantity supplied (Q₂) and the quantity demanded (Q₁) at the price support level.

-The Above Figure Shows Supply and Demand Curves for Milk