Suppose There Is a New Hormone That Will Increase the Amount

question 116

Multiple Choice

Suppose there is a new hormone that will increase the amount of milk each cow produces.If this hormone is adopted by many dairies, what will be the effect on equilibrium price and equilibrium quantity of milk?  

• A) an increase in supply, a higher equilibrium price, and lower equilibrium quantity 
• B) a decrease in supply, a lower equilibrium price, and a lower equilibrium quantity 
• C) an increase in supply, a lower equilibrium price, and a higher equilibrium quantity 
• D) an increase in supply, a higher equilibrium price, and a higher equilibrium quantity

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Definitions:

Common Fixed Expenses

Expenses that do not change with the volume of production or sales and are shared among different segments or products of a business.

Divisional Segment Margin

The profit or loss generated by a specific division or segment of a business, excluding costs not directly tied to that division.

Common Fixed Expenses

Costs that do not vary with the level of production or sales, shared across different segments or products of a business.

Break-Even

The point at which total costs equal total revenues, meaning there is no profit or loss.