Question

The target price establishes the per-unit ceiling on program payments to growers of program crops such as corn and wheat.

a. Deficiency payments
b. Direct payment
c. Excess capacity
d. Target price mechanism

Answer 1

A target price establishes the maximum price per unit that will be paid to growers of program crops. It acts as a ceiling for program payments.

Step-by-step explanation:

A target price is a term used in agriculture and farming. It establishes the maximum price per unit that will be paid to growers of program crops such as corn and wheat. The target price acts as a ceiling for program payments.

For example, let's say the target price for corn is set at $4 per bushel. If the market price of corn falls below $4, the government will make deficiency payments to farmers to make up the difference, ensuring they receive the target price for their crops.