A support price set above the equilibrium price ______. A. Creates a shortage, increases farmers total revenue,

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A support price set above the equilibrium price ______.

A. Creates a shortage, increases farmers’ total revenue, and is efficient 

B. Creates a surplus, which the government buys and dumps on the rest of the world to keep the U.S. market price equal to the support price 

C. Is inefficient because farmers’ marginal cost exceeds U.S. consumers’ marginal benefit 

D. Is efficient because farmers’ marginal cost equals U.S. consumers’ marginal benefit.

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Foundations Of Microeconomics

ISBN: 9780133477108

7th Edition

Authors: Robin Bade, Michael Parkin

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