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Regional Gains and Losses for Consumers and Producers from Changes in Fluid Milk Prices*

Published online by Cambridge University Press:  28 April 2015

Leo V. Blakley  and
John B. Riley
Leo V. Blakley
Affiliation:
Oklahoma State University
John B. Riley
Affiliation:
Kansas State University
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Extract

Equilibrium in a free market can result in prices and quantities which maximize society welfare for a given resource distribution. Departures from equilibrium of the competitive model will involve changes in net social gains and losses not only for the national economy as an aggregate, but also for particular groups or regions. The trade-offs between groups or regions, in fact, may be much larger than the aggregate changes averaged over all groups.

Departures from equilibrium under restricted pricing conditions, such as exist with the federal order marketing system in the fluid milk industry, also will involve social gains and losses on national, regional, and local levels. Given the rapid decline in Grade B or manufacturing grade milk production, the concern about equity, and the evolution of new institutions in the milk market, conditions affecting equilibrium in the fluid milk industry also must change. The nature of these changes can have marked effects on the benefits received by the participants in the industry.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 6 , Issue 2 , December 1974 , pp. 1 - 8
Copyright
Copyright © Southern Agricultural Economics Association 1974

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Footnotes

*

Oklahoma State University Agricultural Experiment Station Journal Article No. 2853.

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