Scenario 5-3 Milk Has an Inelastic Demand, and Beef Has an Elastic

question 68

Multiple Choice

Scenario 5-3
Milk has an inelastic demand, and beef has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent.
-Refer to Scenario 5-3.The equilibrium price will

• A) increase in both the milk and beef markets.
• B) increase in the milk market and decrease in the beef market.
• C) decrease in the milk market and increase in the beef market.
• D) decrease in both the milk and beef markets.

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