TABLE 4-4

-Refer to Table 4-4. If the government were to remove a $1.20 price floor in the milk market, what would be the result?

Question

TABLE 4-4
 
-Refer to Table 4-4. If the government were to remove a $1.20 price floor in the milk market, what would be the result?

Quizplus · Accepted Answer

Removing the price floor would result in a decrease in price as there would no longer be a minimum price that suppliers could charge. This would make milk more affordable and increase the quantity demanded. Additionally, with no price floor, suppliers may increase the quantity supplied in order to make up for the lower price, leading to an overall increase in the quantity of milk demanded. Therefore, the correct choice is C, a decrease in price and an increase in the quantity of milk demanded.

TABLE 4-4 -Refer to Table 4-4. If the Government Were to Remove