Question

Suppose apples are currently selling for 50 cents a piece. Someone says that apple

sellers can't make a decent living if they sell their apples so cheaply. This person says
there should be a law stating that no one can sell an apple and no one can buy an apple
for less than 75 cents. A law to raise the income of apple sellers is suggested. What might
be an unintended consequence (effect) of this law?

Answer 1

The inflation in the cost of apples may cause less people to buy apples, or for people to buy less apples overall. This drop in sales, although the farmer is getting more money per each apple, could cause the farmer to make less money than they would if they were selling apples for 50 cents a piece.