Economics · Agricultural Economics
Consider the following statements regarding the economic effects of a government implementing a Minimum Support Price (MSP) policy for wheat that is higher than the market equilibrium price: 1. There will be an excess supply (surplus) of wheat in the market. 2. Farmers generally gain from higher prices, while consumers may face higher costs. 3. Government procurement at high prices increases the fiscal burden. 4. It ensures allocative efficiency in the overall agricultural sector. Which of the statements given above are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2, 3 and 4
- 22, 3 and 4
- 31 and 4 only
- 41, 2 and 3✓
Correct answer
1, 2 and 3
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