In the diagram, DD shows the demand curve for an agricultural commodity, S1 represents the supply curve in period 1, and S2 represents the supply curve in period 2. The dashed curve XY is a rectangular hyperbola. The government uses a buffer stock scheme to ensure that farm revenue stays unchanged. In period 1, the price is set at P1. What action will the government need to take in period 2 to keep the price at P2?
- Aadd quantity JK to the buffer stock
- Badd quantity KL to the buffer stock
- Crelease quantity KL from the buffer stock
- Drelease quantity KM from the buffer stock