Suppose the government decides that milk producers are not earning a high enough price for their milk to maintain an adequate standard of living and that the solution to the problem is to guarantee the milk producers a minimum price.We would expect that
A)consumers will have to pay a higher price per gallon of milk and will not be able to consume as much as they did before.
B)the government will have to purchase the surplus milk on the market and then find a means of storing this milk.
C)the dairy farmers will enjoy a higher standard of living at the expense of taxpayers and consumers.
D)all of the above

Question

Quizplus · Accepted Answer

Setting a minimum price above the equilibrium price leads to a surplus, requiring government intervention to purchase excess supply, resulting in higher prices for consumers and potential taxpayer burden.

Suppose the Government Decides That Milk Producers Are Not Earning