Answer to Question #131902 in Microeconomics for Saif Ur Rehman

Question

Assume Rs. 200 is the original price of milk per liter and 200,000 liters is the original quantity of supply

Answer 1

• When the price is Rs 200 the quantity of milk supplied is 200,000 liters as shown by point A on the graph below.
• The price and quality of milk supplied are positively correlated. As the price of milk increases the quantity of milk supplied increases.