Question

A price support program: A. lowers the market price by making purchases of a good, thereby...

A price support program:

A. lowers the market price by making purchases of a good, thereby increasing demand.

B. lowers the market price by making purchases of a good, thereby reducing demand.

C. raises the market price by making purchases of a good, thereby increasing demand.

D. raises the market price by making purchases of a good, thereby reducing demand.

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Answer #1

C. raises the market price by making purchases of a good, thereby increasing demand.

A price support is the combination of a minimum price, or price floor, and government purchase of any surplus. It is a combination of two programs which are minimum price, or price floor, and government purchase of any surplus. It increases the demand and increasing the price.

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