Discussion Question
Suppose the dairy farmers convince the federal government to impose price support on milk per gallon. Currently, the market price is $2.25 per gallon. The milk producers pointed out that at that price their profits can barely help them make a decent living. The government passes a law mandating that no milk will be sold below $3.50 per gallon. What do you think would be the immediate impact of that policy? What would be the long-run effect of that policy?