What action must a government take to keep the price of an agricultural commodity stable when demand is greater than supply and when supply is greater than demand?
- Awhen demand exceeds supply: add the excess demand to a buffer stock; when supply exceeds demand: release an amount equal to the excess supply from a buffer stock
- Bwhen demand exceeds supply: meet excess demand by running down a buffer stock; when supply exceeds demand: purchase the excess supply and add it to a buffer stock
- Cwhen demand exceeds supply: subsidise production; when supply exceeds demand: impose a tax on consumers
- Dwhen demand exceeds supply: tax consumers of the commodity; when supply exceeds demand: subsidise production