In a move to free the economy from unnecessary regulation, Congress passes legislation to remove sugar price supports.What would most likely happen to the number of producers of sugar?
A)It would decrease, because sugar prices would fall.
B)It would decrease, because sugar prices would rise.
C)It would increase, because sugar prices would fall.
D)It would increase, because sugar prices would rise.

Question

Quizplus · Accepted Answer

The removal of sugar price supports means that the market will be more competitive and prices will likely fall. This would lead to a decrease in the number of producers of sugar, as the profit margins would become smaller and some producers may not be able to compete.

In a Move to Free the Economy from Unnecessary Regulation