Maximum and minimum prices — practice question

The diagram illustrates the market for onions when it is in equilibrium at point X. The government possesses a stock of onions and wishes to create a new equilibrium at point Y. Which actions ought the government to take?

• AIt should buy an amount equal to XY and subsidise producers by a sum equal to YZ.
• BIt should buy an amount equal to XY and tax producers by a sum equal to YZ.
• CIt should sell an amount equal to XY and subsidise producers by a sum equal to YZ.
• DIt should sell an amount equal to XY and tax producers by a sum equal to YZ.