Question: In relation to the questions below the answer on this website shows Equilibrium price = $165 and E quantity = 4 for question a. For

In relation to the questions below the answer on this website shows Equilibrium price = $165 and E quantity = 4 for question a. For question b the answer says $2 is not possible to sell it at so the rest of the questions are unanswerable. Please explain why $2 is not an option. Thank you.

a)Assuming no government intervention in this market, what is the equilibrium

price and quantity? Illustrate on a graph.

b)Suppose the government guarantees milk producers a price of $2 per litre and

promises to buy any amount of milk that the producers cannot sell. What are

the quantities demanded and supplied at this price? Show on your graph.

c)How much milk would the government be buying (per month) with this

system of price support?

d)Who pays for the milk that the government buys? Who is helped by this

policy? Who is harmed?

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