Task: The milk industry has a number of interesting aspects. Provide economic explanations for the following:
1) Fluid milk is 87% water. It can be dried and reconstituted so that it is almost indistinguishable from fresh milk. What is a likely reason that such reconstituted milk is not produced?
2) The US has regional milk-marketing regulations whose goals are to make each of the regions self-sufficient in milk. What is the likely reason for this.
3) A US Senator from a milk-producing state has been quoted as saying, "I am absolutely convinced...that simply bringing down dairy price supports is not a way to cut production." Is it likely that he is correct? What is a probably reason for his statement?