When the government establishes a minimum price for an agricultural product above the equilibrium price, the government is creating a(n)
A) price ceiling.
B) elevated price.
C) price floor.
D) surplus price.

Question

Quizplus · Accepted Answer

When the government establishes a minimum price for an agricultural product above the equilibrium price, the government is creating a price floor. This means that the price cannot fall below a certain level set by the government, which can lead to a surplus of supply and a potential loss of efficiency in the market.

When the Government Establishes a Minimum Price for an Agricultural