If Price Supports Are Established and Producers Are Producing More

question 130

Multiple Choice

If price supports are established and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to

• A) reduce price supports.
• B) increase price supports.
• C) buy the surplus.
• D) restrict output.

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Definitions:

Required Production

The total quantity of goods that must be manufactured or produced to meet customer demand.

Raw Material Purchasing

The process of acquiring the basic materials or inputs required for the manufacturing or production of goods.

Budgeted Data

Budgeted data refers to financial projections or estimates for future periods, often used for planning and controlling purposes.

Production Needs

The requirements or resources necessary for the production process, including materials, labor, and machinery.