The United States and the European Union impose price floors on many agricultural products.These price floors lead to unwanted surpluses.To deal with a surplus:
A)the U.S.government typically pays farmers to produce as much as possible.
B)the U.S.government in some cases has destroyed the surplus production.
C)the European Union pays farm exporters to sell products for a profit overseas.
D)the U.S.government holds auctions to sell the surplus to the highest bidder.

Question

Quizplus · Accepted Answer

Paying farmers to produce as much as possible (Option A) would only exacerbate the surplus problem. Exporting the surplus (Option C) would not necessarily solve the surplus issue either, as it may not find a market overseas. Holding auctions (Option D) may result in lower prices for farmers. Destroying the surplus (Option B) would eliminate the excess supply and prevent further reductions in prices.

The United States and the European Union Impose Price Floors