The U.S.government restricts the production of peanuts by limiting production licenses.By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted.Economists call this type of program a(n)
A)price ceiling.
B)price floor.
C)opportunity cost.
D)shortage.
E)efficiency move.

Question

Quizplus · Accepted Answer

The government's actions are restricting the supply of peanuts and maintaining prices above the market equilibrium level. This is a characteristic of a price floor program.

The USGovernment Restricts the Production of Peanuts by Limiting Production Licenses