AAEC 1005 Lecture 8: 2:22
4 Apr 2016
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Price floors: created by the gov to protect the seller. Price ceilings: created by gov to protect the consumer. Quotas/licenses: a quantitative limit on the amount of a good or service that can be broug the market in a given time frame (ex. 1quota = authorization to sell one pound of tobacco year. So if you want to sell 10,000lbs in the market, you need to own 10,000 quota. ) Started in the 1930s during great depression to prevent farmers from producing so m the prices of their goods would not lower the prices. You have to own quota, just like you own a tractor. In nc gov issued 600 million pounds of tobacco quote (1 quota = 1 lb) The quota is scarce bc farmers would produce more if it wasn"t there. Based on how much people were producing at the time. Only pure profit for the first people who got it.
