There Has Recently Been an Increase in the Price of Dairy

question 206

Multiple Choice

There has recently been an increase in the price of dairy products used in the production of ice cream. High temperatures have also induced people to consume more ice cream. In the market for ice cream, the effects these changes will have on equilibrium price and quantity are

• A) price will increase, and quantity will decrease.
• B) price will increase, and the effect on quantity is indeterminate.
• C) price will decrease, and quantity will increase.
• D) price will decrease, and the effect on quantity is indeterminate.

---

Definitions:

Total Income

The summation of all earnings or revenue generated by an individual or entity, before any deductions or taxes.

Income Share

The proportion of total national or group income that is received by individuals, households, or classes of income earners.

Entrepreneurs

Visionary individuals who create, manage, and assume the risks of a new business venture, bringing new products or services to the market.