Question: Suppose that you are a policy adviser who does not care at all about social welfare, but is only concerned with minimizing the cost of governmental programs. You are given the task of raising the prices that farmers receive for radishes and for pumpkins. You must choose either agricultural-price supports with the government buying up any surplus, or a subsidy as the mechanism to accomplish your goal. You know that the supply and demand curves for radishes are very elastic, while the supply and demand curves for pumpkins are very inelastic.

a. Which mechanism would you choose to raise radish prices?

b. Which mechanism would you use to raise pumpkin prices? Use diagrams to illustrate your answer.