Use the following to answer question(s): Supply and Demand in Agriculture

-(Exhibit: Supply and Demand in Agriculture) If a price floor at P₄ is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:
A) Q₃ - Q₀.
B) Q₃ - Q₁.
C) Q₂ - Q₁.
D) none of the above are correct.

Question

Use the following to answer question(s): Supply and Demand in Agriculture
 
-(Exhibit: Supply and Demand in Agriculture) If a price floor at P₄ is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:
A) Q₃ - Q₀. 
B) Q₃ - Q₁. 
C) Q₂ - Q₁. 
D) none of the above are correct.

Quizplus · Accepted Answer

The government would have to purchase an amount of output equal to Q₃ - Q₀ because the price floor at P₄ creates a surplus of Q₃ - Q₀.

Use the Following to Answer Question(s): Supply and Demand in Agriculture