Describe a realworld government policy that creates a market

Describe a real-world government policy that creates a market surplus. Be sure to carefully define the relevant market and the stakeholders that are involved in the market. Explain the efficiency implications of the policy you have picked. Make sure to relate your answer to the producer, consumer, and total surplus in the market. In the instance you have described, what is the government\'s motivation for intervening in the market in this way? Will a deadweight loss exist in your example, please explain your analysis?

Solution

. A classic example is the minimum wage law. In this case, the relevant market is the supply and demand for unskilled labor. No, the deadweight loss will not exist in my example. This is highly efficient.