--%>
Assignment Help - homework help

Effect of price regulation on producers

Assume the government regulates price of a good to be no lower than some minimum level. Can such a minimum price make producers as a whole worse off? Describe.
Since a higher price increases revenue and decreases demand, some of the consumer surplus is transferred to producers but some producer revenue is lost since consumers purchase less. The problem along a price floor or minimum price is that it sends the wrong signal to producers. Thinking that more should be produced as the price goes up, producers incur extra cost to produce more than what consumers are willing to purchase at these higher prices. These extra costs can overwhelm gains captured in increased revenues. Thus, unless all producers decrease production, a minimum price can make producers as a whole worse off.

   Related Questions in Biology

  • Q : What is Homologues identification

    Homologues identification: This is the first step in homology the homologues will be unknown. We have many protein databases such as PROSITE, where we modeling. We have to get the homologues to the sequence we have. There will be several number of hom

    		•
  • Q : Symptoms of the Diabetes What are the

    What are the three main significant symptoms of the Diabetes? Briefly illustrate it.

    		•
  • Q : Formation of female gametes of

    Explain the formation of the female gametes of gymnosperms and also the relationship between this process and the concept of the alternation of generations?

    		•
  • Q : Most commonly used fluorescent dyes

    Write down most commonly used fluorescent dyes.

    		•
  • Q : Describe Systems Development Systems

    Systems Development: The SDLC is a process of information system (abbreviated as IS) development. Different SDLC models have been made and can be implemented, comprising waterfall, rapid prototyping, spiral, incremental, fountain, build and fix, synch

    		•
  • Q : Aerobic respiration to pyruvic acid

    What takes place throughout the aerobic respiration to pyruvic acid molecules made up by glycolysis? What sequence of reactions that then follows?

    		•
  • Q : Methods of hemorrhage contention What

    What are the methods of hemorrhage contention termed? Answer: The physiological methods of hemorrhage contention (that is, one of them is blood clotting) are commonl

    		•
  • Q : Difference between metabolic and

    Give the basic difference between metabolic alkalosis and respiratory alkalosis?

    		•
  • Q : Description of neurotransmitter of

    Give a brief description of neurotransmitter of neuromuscular junction? How does nervous system trigger the muscle contraction?

    		•
  • Q : Sources of Conflict - Organizational

    1)     Organizational change: people hold differing views over the direction to go, the routes to take and their likely success, the resources to be used, and the probable outcomes. With the pace of technological, political, and social change increasing and th

    		•