A price support may be pictured by:
A) shifting the demand curve to the right by the amount of the government purchase.
B) shifting the demand curve to the left by the amount of the government purchase.
C) shifting the supply curve to the right by the amount of the government purchase.
D) shifting the supply curve to the left by the amount of the government purchase.
E) drawing a horizontal line below equilibrium price at the supported price.

Question

Quizplus · Accepted Answer

EPrice supports can be visualized in two ways: A) by shifting the demand curve to the right, which reflects an increase in demand due to government purchases, and E) by drawing a horizontal line at the supported price level, which indicates the minimum price at which the product will be sold, regardless of the market equilibrium.

A Price Support May Be Pictured By