A market price support policy establishes price ________ the market equilibrium.
A) floors below
B) floors above
C) ceilings below
D) ceilings above

Question

Quizplus · Accepted Answer

A market price support policy aims to raise prices above the market equilibrium by establishing a price floor. This is done by providing financial incentives or direct purchases of the product at the set price. As a result, the quantity demanded reduces due to the higher prices and the quantity supplied increases, leading to a surplus of the product.

A Market Price Support Policy Establishes Price ________ the Market