In terms of their subjective value scales, the buyers of cows are obviously affected adversely by this policy, since they must either pay higher prices or forgo satisfaction of some of their wants. Some sellers realize a higher price, but because they are also deprived of a portion of their sales, their monetary benefit may be minimal or negative. Other sellers may be excluded from the marketplace entirely. Those sellers who are relatively efficient and capable are just as likely to be excluded as the more marginal producers, since the selection is determined by political means or by accident, and not by market competition.

For the same reason, the sellers who might be most inclined to dispose of their goods at a lower price enjoy no competitive advantage over more marginal sellers. For instance, when price floors are placed on a perishable commodity such as grain, farmers who are most desperate to sell their supply before it deteriorates cannot offer lower prices to induce buyers. Often, the surplus product is purchased by the government. The taxpayers are then saddled, not only with the cost of the purchase, but also with the long-term cost of storing a perishable commodity that has been rendered largely useless, since it cannot be resold or distributed (at least, in the domestic market) without aggravating the market surplus.      Next page


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