Use the following diagram to answer the following questions.

-Refer to Diagram 4-4. If the target price is P₃, the output produced must be sold in the market at a price of:

Question

Use the following diagram to answer the following questions.
 
-Refer to Diagram 4-4. If the target price is P₃, the output produced must be sold in the market at a price of:

Quizplus · Accepted Answer

If the target price is set at P₃, the output produced must be sold at the market price, which is P₁, because the target price mechanism does not directly affect market prices but rather sets a desired price level for producers.

Use the Following Diagram to Answer the Following Questions