Farm Price Support Programs Most Often Take the Form of Price

question 44

Multiple Choice

Farm price support programs most often take the form of price

• A)Ceilings above the equilibrium price.
• B)Floors above the equilibrium price.
• C)Ceilings below the equilibrium price.
• D)Floors below the equilibrium price.

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Definitions:

Market Price

The existing rate at which a good or service is available for buying or selling.

Call Option

A financial contract granting the buyer the right, but not the obligation, to buy an underlying asset at a specified price within a certain period.

Exercise Price

The price at which an option holder can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.