-Refer to the above figure.A price support set at $\mathrm { P } _ { 3 }$ will
A)lead to a surplus of $\mathrm { Q } _ { 3 }$ minus $\mathrm { Q } _ { 1 }$ .
B)lead to a shortage of $\mathrm { Q } _ { 3 }$ minus $\mathrm { Q } _ { 1 }$ .
C)lead to an equilibrium quantity of $\mathrm { Q } _ { 2 }$ .
D)be ineffective.

Question

-Refer to the above figure.A price support set at $\mathrm { P } _ { 3 }$ will
A)lead to a surplus of $\mathrm { Q } _ { 3 }$ minus $\mathrm { Q } _ { 1 }$ . 
B)lead to a shortage of $\mathrm { Q } _ { 3 }$ minus $\mathrm { Q } _ { 1 }$ . 
C)lead to an equilibrium quantity of $\mathrm { Q } _ { 2 }$ . 
D)be ineffective.

Quizplus · Accepted Answer

A price support set at P3 will lead to a surplus of Q3 minus Q1. This is because the price support will encourage farmers to produce more than the equilibrium quantity, Q2. The surplus will be the difference between the quantity supplied at the price support, Q3, and the equilibrium quantity, Q1.

-Refer to the Above Figure P3\mathrm { P } _ { 3 }P3​

-Refer to the Above Figure $\mathrm { P } _ { 3 }$