What would happen in the apple market if the government set a minimum price of $2.00 per apple? What might motivate such a policy?
2007-09-27 16:45:52 · 2 answers · asked by brownk_1999 1 in Social Science ➔ Economics
Just think about it...if apples were $2.00, would you not choose to substitute for oranges or bananas (assume oranges are perfect substitutes for apples)?? Therefore the consumer demand would drop. There would be a surplus of apples (too many). So in order to keep the price high, the government would buy the unsold apples from the farmers.
By setting a minimum price like this, the government would be able to support apple farmers more....this type of thing happens in Alberta to support the wheat farmers...it's not uncommon.
2007-09-27 16:56:50 · answer #1 · answered by miss_j 6 · 0⤊ 0⤋
The apple market would disappear overnight and people would start planting their own apple trees.
Politicans who own apple orchards.
2007-09-27 23:53:39 · answer #2 · answered by Bill 7 · 0⤊ 0⤋