Which of the Following Is Not an Advantage of Direct

question 73

Multiple Choice

Which of the following is not an advantage of direct income support to farmers?

• A) Farm incomes increase without market surpluses.
• B) In the absence of other government intervention and externalities, marginal cost pricing is practiced.
• C) In the absence of other government intervention and externalities, technical efficiency is achieved.
• D) Market prices and total farm income increase.

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Definitions:

Cost-Plus Approach

A pricing strategy where a fixed percentage is added to the total cost of producing a product or service to determine its selling price.

Markup Percentage

The percentage added to the cost price of goods to cover overhead and profit.

Total Cost

The sum of all costs associated with producing or acquiring goods and services, including direct and indirect expenses.

Cost-Plus Approach

A pricing strategy where a fixed percentage or a fixed amount is added to the cost of the product to determine its selling price.