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For the last 85 years, the U.S. government has used price supports to provide income assistance to American farmers. To implement these price supports, at
For the last 85 years, the U.S. government has used price supports to provide income assistance to American farmers. To implement these price supports, at times, the government has used price floors, which it maintains by buying up the surplus farm products. At other times, it has used target prices, a policy by which the government gives the farmer an amount equal to the difference between the market price and the target price for each unit sold. Consider the market for corn depicted in the accompanyingdiagram.
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