Last year, 1000 gallons of almond milk (a non-dairy product) were sold at a price of $10. Yet, this year, a bad harvest in California has wiped out a significant part of the almond harvest. At the same time, a larger number of people are looking to shift away from dairy products towards non- dairy alternatives. Because of these two changes, the equilibrium price will increase and change in the equilibrium quantity is unambiguous. O the equilibrium price will decrease but change in the equilibrium quantity is ambiguous. the change in the equilibrium price is ambiguous, but the equilibrium quantity will increase. O the equilibrium price will increase but change in the equilibrium quantity is ambiguous.

Last year, 1000 gallons of almond milk (a non-dairy product) were sold at a price of $10. Yet, this year, a bad harvest in California has wiped out a significant part of the almond harvest. At the same time, a larger number of people are looking to shift away from dairy products towards non- dairy alternatives. Because of these two changes, the equilibrium price will increase and change in the equilibrium quantity is unambiguous. O the equilibrium price will decrease but change in the equilibrium quantity is ambiguous. the change in the equilibrium price is ambiguous, but the equilibrium quantity will increase. O the equilibrium price will increase but change in the equilibrium quantity is ambiguous.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider apples and oranges, which we'll assume are substitutes. If the price of oranges falls, we'll see in the market for apples and in the market for oranges. None of the listed options is correct. O a decrease in quantity demanded; an increase in demand a decrease in demand; an increase in quantity demanded a decrease in quantity demanded; a decrease in demand an increase in demand; a decrease in quantity demanded.
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The price of cereal, a complement good, has decreased. At the same time, a new and improved pasteurization process makes milk production more efficient. Given these two effects, what can we say about the equilibrium price and quantity of milk? O Equilibrium quantity will increase; the effect on price is ambiguous. Equilibrium price will increase; the effect on quantity is ambiguous. O Equilibrium price will decrease; the effect on quantity is ambiguous. O Equilibrium quantity will decrease, equilibrium price will increase.
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