If Scientists Discover That Steamed Milk, Which Is Used to Make

question 118

Multiple Choice

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

• A)Both the equilibrium price and quantity would increase.
• B)Both the equilibrium price and quantity would decrease.
• C)The equilibrium price would increase, and the equilibrium quantity would decrease.
• D)The equilibrium price would decrease, and the equilibrium quantity would increase.

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Definitions:

Capital Expenditure

Capital expenditure involves funds spent by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings.

Wages

Payments made to employees based on the amount of time worked or the level of output produced.

Output

The total amount of goods or services produced by a company, industry, or economy.

Prospective Sunk Costs

Future costs that, once incurred, cannot be recovered and should not influence current decision-making processes.