A price paragraph warranty is a national instrument for market adjustment. The state ensures to national producers a minimum paragraph price by the world price lies in general. Due to the unchanged demand surplus situations develop. The surplus goods can be set off in extreme cases only to world prices, the total balance of a price paragraph warranty settle mostly negatively on the national net welfare.

The overall economic use of price paragraph warranties is disputed like many of the market-adjusting measures. They affect negatively the world economy, in particular for swelling and developing countries.

In Europe among other things a price paragraph warranty for wheat (the portion of the farm subsidies of the European Union household approx. 40% amount to) prevails.

See also: Application of fixed prices, world trade organization, protectionism, tariff (delivery)

Articles in category "Price paragraph warranty"

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