Answer to Question #204211 in Microeconomics for Emmericia

Question

Recent research article entitled “Milk Manic” made headlines in South Africa. The article explains the significant health benefits one glass of milk per day. In only seven days you will become stronger and smarter, but milk super changes your immune system. The scientist father found that consuming a glass of milk a day as a cure for high blood pressure, anxiety and insomnia. 5.1. By the aid of a graph, illustrate and explain how the research article will affect the equilibrium price and quantity in the milk market.

Answer 1

If the price is changed above the equilibrium, quantity supplied will be more than the quantity demanded $(Q_S\gt Q_D)$ which leads to surplus in the economy.