What Is the Result of an Agricultural Support Price Established

question 119

Multiple Choice

What is the result of an agricultural support price established above the equilibrium price?

• A) The market gravitates toward and remains in equilibrium.
• B) There will be excess quantity supplied of the product involved.
• C) There will be excess quantity demanded the product in this market.
• D) Since the support price is set above the equilibrium price, it will have no impact on the market price.

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Definitions:

Revenues

The gross increase in owner’s equity resulting from business activities entered into for the purpose of earning income.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Nonfinancial Information

Data that relates to the operational, environmental, and social aspects of a business, which cannot be easily quantified in monetary terms.

Employee Turnover

The rate at which employees leave a company and are replaced by new employees.