In the diagram, DD represents the demand curve for an agricultural commodity, S1 is the supply curve in period 1 and S2 is the supply curve in period 2. The dashed curve is a rectangular hyperbola. The government runs a buffer stock scheme, setting the price at OP1 in period 1 and OP2 in period 2. How do output and farm revenue in period 2 compare with period 1?
- Aoutput higher; farm revenue same
- Boutput higher; farm revenue higher
- Coutput lower; farm revenue higher
- Doutput lower; farm revenue same