Suppose the government gives a subsidy to each gallon of milk sold in a competitive milk industry. Describe what happens to the price of milk in the short run and the long run when farmers are free to enter and exit. What happens to milk output and the number of farmers in the short run and the long run?

Question

Quizplus · Accepted Answer

The Answer of Suppose the government gives a subsidy to each gallon of milk sold in a competitive milk industry. Describe what happens to the price of milk in the short run and the long run when farmers are free to enter and exit. What happens to milk output and the number of farmers in the short run and the long run?

Suppose the Government Gives a Subsidy to Each Gallon of Milk