Which of the Following Is True Regarding a Price Support

question 136

Multiple Choice

Which of the following is true regarding a price support set above the equilibrium price?
i.The price support increases the price consumers pay.
ii.The price support creates a deadweight loss.
iii.The price support decreases output.

• A) i and ii
• B) i and iii
• C) iii only
• D) i, ii, and iii
• E) i only

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Definitions:

Diminishing Marginal Product

A principle stating that as additional units of a variable input are added to a fixed input, the marginal product of the variable input eventually decreases.

Production Function

Describes the relationship between inputs used in production and the resulting output.

Positive

Characterized by or denoting an occurrence or condition that is affirmatively present or beneficial, often used in the context of positive effects or outcomes.

Lady of Auxerre

A small, ancient Greek sculpture representing a goddess or maiden, notable for its archaic style and originating from Crete.