Consider the market for chocolate ice cream. For the following events: (1) determine whether the event affects the supply or demand curve; (2) identify what factor has changed that caused supply or demand to shift (e.g., change in preferences, number of sellers, prices of related goods, etc.); (3) use a clearly labelled supply and demand diagram to show the effect of the event on the equilibrium price and quantity of chocolate ice cream. a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk- producing cows in their herds by 40 percent. These dairy farmers supply cream that is used to manufacture chocolate ice cream. A report by the American Medical Association reveals chocolate has significant health benefits. The discovery of cheaper synthetic vanilla flavoring lowers the costs of producing vanilla ice cream. [Be clear about any assumptions you make about the relationship between chocolate ice cream and vanilla ice cream.] New machinery for mixing and freezing ice cream lowers the amount of electricity needed for producing chocolate ice cream.
Consider the market for chocolate ice cream. For the following events: (1) determine whether the event affects the supply or demand curve; (2) identify what factor has changed that caused supply or demand to shift (e.g., change in preferences, number of sellers, prices of related goods, etc.); (3) use a clearly labelled supply and demand diagram to show the effect of the event on the equilibrium price and quantity of chocolate ice cream. a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk- producing cows in their herds by 40 percent. These dairy farmers supply cream that is used to manufacture chocolate ice cream. A report by the American Medical Association reveals chocolate has significant health benefits. The discovery of cheaper synthetic vanilla flavoring lowers the costs of producing vanilla ice cream. [Be clear about any assumptions you make about the relationship between chocolate ice cream and vanilla ice cream.] New machinery for mixing and freezing ice cream lowers the amount of electricity needed for producing chocolate ice cream.
Chapter4: Supply And Demand: An Initial Look
Section: Chapter Questions
Problem 2TY
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- Consider the market for chocolate ice cream. For the following events: (1) determine whether the event affects the supply or
demand curve; (2) identify what factor has changed that caused supply or demand to shift (e.g., change in preferences, number of sellers, prices of related goods, etc.); (3) use a clearly labelled supply and demand diagram to show the effect of the event on theequilibrium price and quantity of chocolate ice cream.
a. A severe drought in the Midwest causes dairy farmers to reduce the number of milk- producing cows in their herds by 40 percent. These dairy farmers supply cream that is used to manufacture chocolate ice cream. - A report by the American Medical Association reveals chocolate has significant health benefits.
- The discovery of cheaper synthetic vanilla flavoring lowers the costs of producing vanilla ice cream. [Be clear about any assumptions you make about the relationship between chocolate ice cream and vanilla ice cream.]
- New machinery for mixing and freezing ice cream lowers the amount of electricity needed for producing chocolate ice cream.
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