The following figures show the demand and supply of butter as
estimated by the Ontario dairy marketing board. Assume the market
for butter is currently operating at market equilibrium. a)
The marketing board would like to set a restriction that prevents
the price of butter falling below $0.45/100g. What are the
advantages and disadvantages of this decision? Explain.
b) Instead of the above noted price restriction assume a
"quota" is established. What effects would this have on the
market for butter? Explain.*
The Following Figures Show The Demand And Supply Of Butter As Estimated By The Ontario Dairy Marketing Board Assume The 1 (22.39 KiB) Viewed 28 times
Price/100 g Quantity demanded (millions of grams) 100 Quantity supplied (millions of grams) 900 200 800 $ 0.50 S0.45 $ 0.40 S 0.35 300 700 400 600 500 $0.30 S0.25 500 400 600 700 $ 0.20 300 800 S0.15 200
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