CAF-7 · Chapter 3 · Question 6 of 15
A domestic sugar producer operates in a market where the government strictly regulates the minimum price of sugarcane to protect local farmers, while also imposing heavy tariffs on imported sugar. These market conditions are shaped by:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Political factors
Explanation
Government interventions in the form of price floors (minimum prices), subsidies, and import tariffs are classic examples of Political factors intended to support or protect specific local industries.
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