When the government implements a price support program
A) It may end up buying a lot of the good, for which it has little or no use
B) The goal is to increase the market price of the good
C) The deadweight loss created can be larger than that created by a price floor
D) All of these

Question

Quizplus · Accepted Answer

When the government implements a price support program, it may end up buying a lot of the good, creating a surplus for which it has little or no use. The goal of price support is to increase the market price of the good. However, the deadweight loss created by the program can be larger than that created by a price floor. Therefore, all of the given options are correct.

When the Government Implements a Price Support Program