Why did the Northeast Interstate Dairy Compact fail to raise retail milk prices in the New England market? The Northeast Interstate Dairy Compact failed to raise retail milk prices because

The Northeast interstate Diary Compact failed to raise retail milk prices simply because non cartel milk producers supplied milk at lower prices.

Explanation:

As stated in the answer column, the Northeast interstate dairy compact failed to raise retail milk prices simply because non cartel milk producers supplied milk at lower prices.

It must be stated that Northeast interstate diary compact was a cartel formed by 6 new England states - northeastern United States, Maine, Vermont, New Hampshire, Massachusetts, Rhode Island and connecticuts. These are thus independent states who resolved to come together to dictate the market. They could do this by looking at ways to stabilize market, dictate prices and sales in a commodity market.

In this scenario, however, the Northeast interstate diary compact cartel actions were simply checkmated by the actions and inactions of the non cartel members. As a rational body, the action of the non cartel members to supply milk at lower prices has weakened whatever price control the cartel seeks to establish. And to remain relevant and competitive to the rational end user, they are forced to maintain the retail prices and not increase it outrageously.

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