Assume you are a policymaker in Washington DC. Lobbyists for the dairy farmers of America have put pressure on their representatives to put a price control on milk. You have been assigned a position on a new committee to study the impact of such a control.
Your job is to:
- Determine which type of price control would benefit the farmers, a price ceiling or a price floor.
- Illustrate using a supply and demand graph what such an artificial price looks like.
- Explain what the results of such a move are for the milk