Question: During the summer of 2009 at the European Union s headquarters

During the summer of 2009 at the European Union’s headquarters in Brussels, dairy farmers across Europe protested low milk prices caused by the EU’s move away from farm crop subsidy programs toward more heavy reliance on market-determined prices for agricultural products. The Wall Street Journal reported that the dairy farmers demanded “a fair price for (their) milk, which covers at least (their) production cost and some profit margin.” The EU Farm Commissioner responded, “What farmers need to do is produce less.”
a. Although in economics there is no such thing as a “fair” price, how might market-determined prices be considered “fair” in an economic sense?
b. Why don’t dairy farmers take the Commissioner’s advice and just produce less milk?

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