Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?
a. The quantity of eggs demanded will increase.
b. Egg demand will decrease.
c. Egg supply will increase.
d. Egg supply will decrease.
D
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Farmer John can produce as much corn as he wants at the going price of $48 per bushel. At his current production level, the marginal cost is $18 . What should the company do?
a. Increase production b. Decrease production c. Stay at this level of production d. None of the above
If the free market is called upon to provide public goods, then:
a. there will more goods provided than is optimal. b. there will be fewer goods provided than is optimal. c. the market will provide the optimal number of goods. d. the market price will be correct, but the optimal amount of output will not be produced. e. the firms will earn excess profit.