When a price support is set below the equilibrium price,producers ________ the quantity supplied,and consumers ________ the quantity demanded.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) do not change; do not change

Question

Quizplus · Accepted Answer

When a price support is set below the equilibrium price, it does not affect the market because the market price is already higher than the support level. Therefore, producers and consumers do not change their behavior based on the price support.

When a Price Support Is Set Below the Equilibrium Price,producers