Question

Suppose the market price of corn is​ $5 a bushel but the government sets a price of​ $7. As a​ result_______________--

A. the private demand will increase over time until​ $7 is the market price.
B. the government must purchase the surplus to maintain the price.
C. there is a shortage of corn.
D. farmers will reduce planting until the market price is​ $7.

Answer 1

B - The government must purchase the surplus to maintain the price.