Price Floor Effects on Raw Milk Markey

COLEGIO INTERNACIONAL DE BOGOTA

EXTENDED ESSAY

How did the change in the price floor imposition method in the raw milk market did affect a firm such as Pasteurizadora Santo Domingo?

SUBJECT: Economics

STUDENT: Juan Felipe Vargas Leon

PERSONAL CODE: 000681-018 dxd 104

WORD COUNT: 3804 words.

INTERNATIONAL BACCALAUREATE ORGANIZATION

February 01, 2013

INDEX

• CHAPTER 1: ABSTRACT………………………………………………………………………pg.3

• CHAPTER 2: INTRODUCTION……………………………………………………………..pg.4

• CHAPTER 3: THE MARKET……………………………………………………………….….pg.5

• CHAPTER 4: WHAT IS A MINIMUM PRICE…………………………………………..pg.6

• 4.1-) DEFINITION…………………………………………………..pg.6
• 4.2-) MINIMUM PRICE IN THE RAW MILK

 MARKET: WHO AND TO WHY IMPOSE IT………………pg.8

• CHAPTER 5: IMPOSITION OF THE MINIMUM PRICE BEFORE 2012……….pg.8

• CHAPTER 6: IMPOSITION OF THE MINIMUM PRICE AFTER 2012……..…pg.11

• CHAPTER 7: EFFECTS OF THE MINIMUM PRICE

                                  IMPOSITION 2007-2012……………………………………….………..pg.13

• CHAPTER 8: EFFECTS OF THE OF THE MINIMUM

                       PRICE IMPOSITION AFTER 2012…………………………………….pg.16

• CHAPTER 9: CONCLUSION………………………………………………………………..pg.19
• BIBLIOGRAPHY…………………………………………………………………………….…..pg.20

1. Abstract:

Pasteurizadora Santo Domingo is a firm that produces dairy goods, such as milk, yogurt, koumiss, and cheese; but in this paper we will only take care of the production of milk. The firm buys raw milk to farmers who sell raw milk to big firms and small firms. In the raw milk market, the government thinks that a price control is necessary in order to correct some market failures or fluctuations that occur so it awards an entity called CORPOICA to make some technical investigation of the market and impose a price floor, then the government will accept this price floor or not.