Refer to the diagram. A government price support program to aid farmers is best illustrated by

Question

Quizplus · Accepted Answer

Price support programs aim to keep prices above the equilibrium level (price B in this diagram), which is achieved by the government buying surplus production to reduce supply and increase price. This results in a new price level (price C) that is higher than the market-clearing price but lower than the cost of production for farmers (price A). Therefore, the correct choice is B, price C, which represents the artificially supported price level resulting from the price support program.

Refer to the Diagram