In this way, taxation on sellers also diminishes the market in question, as both supply and demand lower to reach the new equilibrium.
The ultimate effect of all forms of taxation on goods is therefore that both buyers and sellers are affected, as the market responds to both changes in demand and supply, regardless of which carries the initial effect.
II. PRICE CONTROLS and TAXATION on MILK
According to Chris Edwards (2007), the milk market has been affected by government-imposed price controls since the 1930s, with the implementation of "marketing order" regulations. According to these, minimum prices were imposed upon diary processors, which were payable to farmers. This policy limits marketing competition by imposing a minimum government price upon dairy products. In other words, entrepreneurs are unable to supply dairy products at competitive prices and raise demand as a result. Another effect of this price control factor on the market...
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