Over the last 8 years, the transformation process with structural changes and the worsening of production technology in the Bulgarian dairy sector has led to a dramatic reduction of milk quality in Bulgaria. The improvement of the raw milk quality and the harmonisation of Bulgarian standards...

Against the background that a combination of price-cap and minimum quality regulation is socially optimal but hard to implement, the aim of this paper is to develop an alternative optimal regulatory mechanism that involves lower administrative costs. In a modelling framework that adequately...