Problem
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:
a.) Determine which type of price control would benefit the farmers, a price ceiling or a price floor.
b.) Illustrate using a supply and demand graph what such an artificial price looks like.
c.) Explain what the results of such a move are for the milk market. In other words, will there be a SHORTAGE, a SURPLUS, or neither created?
d.) Finally, what are the impacts of this price control for those who wish to purchase milk? (In other words, what is the unintended consequence of this action? How will people deal with this change in the market?)
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.