Ice Cream Enthusiasts Rejoice: Exciting News About Milk Prices!
What impact will a decrease in the price of milk have on the equilibrium price of ice cream?
a. Increase and the equilibrium quantity of ice cream to increase.
b. Increase and the equilibrium quantity of ice cream to decrease.
c. Decrease and the equilibrium quantity of ice cream to increase.
d. Decrease and the equilibrium quantity of ice cream to decrease.
Answer:
The correct answer is C.
Attention ice cream lovers! Get ready for some exciting news that will make your favorite frozen treat even more delightful. A decrease in the price of milk, the key ingredient in making ice cream, will result in a decrease in the equilibrium price of ice cream. This means that you may soon be able to indulge in more ice cream without breaking the bank!
When the price of milk decreases, the cost of producing ice cream also decreases. As a result, ice cream producers will be able to offer their products at a lower price while still maintaining their profitability. This decrease in the equilibrium price of ice cream will make it more affordable for consumers, leading to an increase in the quantity of ice cream demanded.
So, the next time you're craving a scoop of your favorite ice cream flavor, remember to thank the decrease in milk prices for making it more accessible and affordable. Enjoy your frozen treat guilt-free and savor every delicious bite!