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Sergeu [11.5K]
3 years ago
9

Suppose the government enacts a price floor on milk, which leads to a surplus in the market. How will the government then attemp

t to equalize supply and demand?
Business
1 answer:
Anna [14]3 years ago
3 0

Answer:

Price Floor led Excess Supply can be solved by : Preserving goods Buffer Stock ; or processing goods to increase their shelf life (in case of perishable goods like Milk)

Explanation:

Unregulated markets are at equilibrium where : market demand , market supply are equal ; and downward sloping demand curve , upward sloping supply curve intersect.

Price Floor is minimum mandated price set by government, below which a good can't be sold in the market. It is usually set above equilibrium price, to protect interest of sellers. Example : Minimum Support Price as minimum agricultural  goods price to protect interest of farmers, Given Milk Price floor case.

Price Floor creates artificially higher prices ; so increases supply, decreases supply & hence creates Excess Supply. Government can solve this excess supply by preserving stock supply for contingent times , eg -  maintaining buffer stock. If the good is of perishable nature, as given milk case : it should be processed further to increase its shelf life, eg - cheese, such that the stock supply can be released at a slower pace.

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<h3>What are bonds?</h3>

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2 years ago
Negative externalities that arise from the production of a gooda. cause an increase in the demand for the goodb. cause a decreas
Dennis_Churaev [7]

Answer:

The correct answer is option c.

Explanation:

Externalities refers to the situation in which costs or benefits arising from the activities of someone are incurred or  received by the some other third party.

Externalities can be classified into two types, namely, positive and negative.

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Negative externalities lead to market failure.

6 0
3 years ago
WILL GIVE BRAILIEST
Korvikt [17]
C. Current status and intermediate goals
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3 years ago
If Ana considers cake a substitute for Top Ramen noodles, and her quantity demanded for Top Ramen goes from 30 to 40 packets eve
kondaur [170]

Answer:

$0.35

Explanation:

The computation of the price elasticity of demand using mid point formula is shown below:

= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of price)

So, Change in quantity demanded would be

= Q2 - Q1

= 40 - 30

= 10

Now, Average of quantity demanded

= (40 + 30) ÷ 2

= 35

Change in price

= P2 - P1

= $35 - $15

= $20

And, the average of price would be

= ($35 + $15) ÷ 2

= $25

Cross price elasticity of demand = (10 ÷ 35) ÷ ($20 ÷ $25)

= 0.28 ÷ $0.8

= $0.35

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3 years ago
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iris [78.8K]
Another student’s work
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3 years ago
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