Describe utilization of production limits in practice to raise the prices of the following goods or services (1) drinks in a restaurant or bar, (2) wheat or corn?
State authorities typically regulate the number of liquor licenses. Requiring that any bar or restaurant which serves alcohol have a liquor license and then restricting the number of licenses available, the State limits entry by new bars & restaurants. This limitation lets those establishments that have a license to charge a higher price for alcoholic beverages.
Federal authorities generally regulate the number of acres of wheat or corn in production through creating acreage restricatinn programs that give farmers financial incentives to leave some acreage idle. This decreases supply, driving up the price of wheat or corn.