To protect farmers during a bumper harvest, the governmen...
To protect farmers during a bumper harvest, the government usually
Set a maximum price
Release products from the buffer stock
Sell the excess to consumers
Set a minimum price
Correct answer is D
During seasons where farmers experience a bumper harvest, the government protect the farmers by setting minimum prices that the produce can be exchanged for. This is done in order to avoid a situation where farmers end up exchanging their products for an amount less than the value of the product.
As the law of demand would have it, when the supply is higher than the demand, prices will fall. Hence the government set the minimum price at which the produce can be sold.
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