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In U. S. agricultural policy, output is reduced by incentives rather than by outright quotas. Acreage limitation programs give farmers financial incentives to leave some
In U. S. agricultural policy, output is reduced by incentives rather than by outright quotas. Acreage limitation programs give farmers financial incentives to leave some of their acreage idle. Suppose that such a program is depicted in the listed graph and the program successfuly raises the price to PS. How much will the government have to pay farmers to reduce output to Q1?
Draw a triangle or rectangle to show the amount of these payments on the listed graph.
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