HoneyBee Farms, a medium-size producer of honey, operates in a market that fits the competitive market definition relatively well. However, honey farmers are assisted by support prices above the price that would prevail in the absence of controls. The owner of HoneyBee Farms, as well as some other honey producers, complain that they can’t make a profit even with these support prices. Explain why. Explain why even higher support prices would not help honey farmers in the long run.
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