If There Is a Decline in the Price of Milk

question 172

Multiple Choice

If there is a decline in the price of milk, an input in the production of ice cream, then there will be a(n)

• A) decrease in the supply of ice cream and a leftward shift of the supply curve.
• B) decrease in the quantity of ice cream supplied and a movement up along the supply curve.
• C) increase in the supply of ice cream and a rightward shift of the supply curve.
• D) increase in the quantity of ice cream supplied and a movement down along the supply curve.

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Definitions:

Surplus

The amount by which the quantity of a product supplied exceeds the quantity demanded at a specific price, often leading to a decrease in price.

Shortage

A situation where the demand for a product or service exceeds its supply in a market.

Equilibrium Quantity

Equilibrium Quantity is the quantity of goods or services supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded.

Demand and Supply of Wheat

Refers to the quantity of wheat that consumers are willing to purchase at various prices and the quantity that producers are willing to offer for sale, which together determine the market price of wheat.