Canada's dairy industry is a rich, closed club If you want to be a dairy farmer, you buy a plot of land and some cows and start to sell your milk. Not in Canada. There, farmers must buy a quota to produce a set amount of milk. The situation is similar in the markets for chicken and eggs. Source: The Globe and Mail, June 25, 2015 Draw a graph to illustrate the Canadian market for milk. With a production quota, show the quantity of milk produced, the price, consumer surplus, producer surplus, and the deadweight loss created. The graph shows the demand curve and supply curve in the Canadian milk market. Draw a line to indicate the production quota if the production quota is 250 million gallons a year. Label it. Draw a point to show the quantity produced and the price paid by consumers. Draw shapes to show the consumer surplus, the producer surplus, and the deadweight loss created. Label them. 10 8- 6- Price (dollars per gallon) D 100 200 300 400 500 Quantity (millions of gallons per year) S 600 G

Canada's dairy industry is a rich, closed club If you want to be a dairy farmer, you buy a plot of land and some cows and start to sell your milk. Not in Canada. There, farmers must buy a quota to produce a set amount of milk. The situation is similar in the markets for chicken and eggs. Source: The Globe and Mail, June 25, 2015 Draw a graph to illustrate the Canadian market for milk. With a production quota, show the quantity of milk produced, the price, consumer surplus, producer surplus, and the deadweight loss created. The graph shows the demand curve and supply curve in the Canadian milk market. Draw a line to indicate the production quota if the production quota is 250 million gallons a year. Label it. Draw a point to show the quantity produced and the price paid by consumers. Draw shapes to show the consumer surplus, the producer surplus, and the deadweight loss created. Label them. 10 8- 6- Price (dollars per gallon) D 100 200 300 400 500 Quantity (millions of gallons per year) S 600 G

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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