Answer to Question #213357 in Accounting for thabang

Question

This question is based on the following information for ice cream: What will happen to the equilibrium position if there is a decrease in the price of milk that is used in the production of ice cream?

•  A. Both the equilibrium price and quantity will decrease.
•  B. The equilibrium price will increase and the equilibrium quantity will decrease.
•  C. Both the equilibrium price and quantity will increase.
•  D. The equilibrium price will decrease and the equilibrium quantity will increase

Answer 1

B. The equilibrium price will increase and the equilibrium quantity will decrease.