Explain how a government guaranteed minimum price can support farmers and help stabilize prices across seasons.

### What a good answer covers - Seasonal changes in supply can create excess output and depress in-season prices. - A guaranteed minimum price gives producers a floor that can reduce the risk of very low returns. - Government purchases can remove some in-season excess supply from the market. - Stored or exported output can be sold later, helping moderate off-season scarcity and prices. - Storage and transport costs affect the eventual resale price. ### The concept The note assumes demand stays constant within the year while supply changes by season. During the in-season, a supply increase can push prices down. Government purchases absorb some surplus and establish support for producers. Later release of stored goods can increase availability in the off-season, although handling costs mean the government's selling price may exceed the guaranteed minimum. ### Terms - **Guaranteed minimum price**: a government-supported price intended to prevent a product's price from falling below a stated level. ### Remember A price floor supports producers, while storage and later release can smooth seasonal availability.