Answer to Question #239620 in Microeconomics for Blessing

Question

If dairy farming is subsidised,we would expect the value of a litre of milk to be

Answer 1

Solution:

If dairy farming is subsidized, we would expect the value of a litre of milk to be greater than the price paid by the consumer for a litre of milk.

This is because a subsidy on dairy farming will tend to reduce the cost of producing milk and increase the supply of dairy products in the market. It will be cheaper for dairy farmers to produce their products and deliver them to the market.