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------题目------
The following appeared in a letter to the editor of a Batavia newspaper.
'The department of agriculture in Batavia reports that the number of dairy farms throughout the country is now 25 percent greater than it was 10 years ago. During this same time period, however, the price of milk at the local Excello Food Market has increased from $1.50 to over $3.00 per gallon. To prevent farmers from continuing to receive excessive profits on an apparently increased supply of milk, the Batavia government should begin to regulate retail milk prices. Such regulation is necessary to ensure both lower prices and an adequate supply of milk for consumers.'
------正文------
In this letter, the arguer suggests that the Batavia government should control retail milk prices in an attempt to prevent farmers from earning too much money while there is an increase in the supply of milk. In supporting his proposition, the arguer quotes the reports from the department of agriculture that the number of dairy farms throughout the country has increased. He also points out that at the same time, the milk price at the local Excello Food Market has risen from 1.50 to over 3.00 per gallon. The arguer believes the price regulation will keep milk prices remain at a lower level and still guarantee enough supply of milk for consumers. A careful analysis of his statement disclose that it is flawed in several critical aspects.
First of all, the mere fact that the number of dairy farms increases to a level 25% higher than it was 10 years ago is insufficient evidence to conclude that the actual supply of milk has increased. The supply of milk does not depend on the number of farms in the country: a country with a small number of large dairy farms may still be able to provide more milk than a country with a large number of small dairy farms. Therefore, if the present milk farms in this country are much smaller in both size and productivity than those 10 years ago, it is very likely that the total supply of milk is actually decreasing.
Secondly, even if the supply of milk has increased, the statement that farmers are receiving excessive profits is YET open to doubt. It is true that the price of milk has gone up at the local Excello Food Market, however, without/lack of information about the prices in other markets of Batavia, we have no reason to believe that it is a nationwide phenomenom. So if the milk prices have decreased in most of the markets, the farmers are actually getting less revenues and hence probably, less profits.
An additional factor that affects the profits is the costs of running milk farms, which include the maintaince costs of meadows, the fodder costs, workers' wages, and management fees, etc. A rise in any or several of these costs will result in a rise in the total costs, and therefore less profits under some certain revenue.
There is another point that worths considering: the inflation in these ten years. As common sense tellls us, given a fixed amount of income, the higher prices we face, the less goods we can buy. So if Batavia suffers from a higher rate of inflation than the increase in milk prices during this time period, farmers may be worse off than 10 years ago even if the prices have gone up.
Thirdly, the arguer unfairly assumes that there will still be sufficient supply of milk even if the retail milk price is under control. Sure lower prices benefit the consumers, but they are USUALLY not good for the suppliers. If the prices of milk is reduced to an unsatisfactory level to some milk suppliers, they will probably quit the market and shift to other well-paid business. In this case, adequate supply of milk is not guranteed. And unless the arguer could demonstrate that the control of price will not cause the shortage of milk supply, his conclusion about such regulation is PRESUMPTUOUS. |
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