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14 May, 18:14

Why does the agricultural price supports are inconsistent with free-market principles?

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Answers (2)
  1. 14 May, 18:42
    0
    They allow government to influence farmers' decisions about what and how much to produce.

    Explanation:

    Price supports are government subsidies or price controls used to artificially raise or decrease prices on the agricultural market.

    Farmers allows the government to influence their decisions about what and how much to produce, this causes inconsistency with the free market principles with the agriculture price support. This is an effective price management economic policy to ensure that farmers have sufficient opportunities and incomes to continue producing at the cost of the products they want.
  2. 14 May, 18:56
    0
    This grants the government permission to directly affect farmers' stance or decisions concerning

    what to produce and how much to produce.

    Explanation:

    A free market is the one where willing

    exchange and the laws governing supply and

    demand usually provide the only base for the

    economic system, excluding hhe government intervening. Considering the way the government intervenes or lallows itself with the right to agricultural matters of a country, there is likely no free-market principles enjoyed by the agricultural sector of an economy.
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