Which of the Following Would Result from a Price Support

question 59

Multiple Choice

Which of the following would result from a price support program when the support price is set above the equilibrium price,ceteris paribus?

• A)Output would decline.
• B)The price paid by consumers would rise.
• C)The consumption of the product would rise.

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Definitions:

Substitute

An alternative product or service that can replace another in satisfying consumer needs or wants.

Complement

A good or service that is used together with another good or service, often enhancing the value or utility of the primary good.

Income

The monetary payment received for providing labor, producing goods, or investing capital, often measured over a specific time period.

Movement Along

Refers to a change in the quantity demanded or supplied of a good, due to a change in its price, represented graphically as a movement along a demand or supply curve.