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A survey indicated that chocolate ice cream is Americas favorite ice-cream flavor. For
Chapter 0, Problem 1(choose chapter or problem)
A survey indicated that chocolate ice cream is Americas favorite ice-cream flavor. For each of the following, indicate the possible effects on the demand and/or supply, equilibrium price, and equilibrium 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 a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream. b.A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits. c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream. d.New technology for mixing and freezing ice cream lowers manufacturers costs of producing chocolate ice cream.
Questions & Answers
QUESTION:
A survey indicated that chocolate ice cream is Americas favorite ice-cream flavor. For each of the following, indicate the possible effects on the demand and/or supply, equilibrium price, and equilibrium 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 a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream. b.A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits. c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream. d.New technology for mixing and freezing ice cream lowers manufacturers costs of producing chocolate ice cream.
ANSWER:Problem 1
A survey indicated that chocolate ice cream is Americas favorite ice-cream flavor. For each of the following, indicate the possible effects on the demand and/or supply, equilibrium price, and equilibrium 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 a third. These dairy farmers supply cream that is used to manufacture chocolate ice cream.
b.A new report by the American Medical Association reveals that chocolate does, in fact, have significant health benefits.
c. The discovery of cheaper synthetic vanilla flavoring lowers the price of vanilla ice cream.
d.New technology for mixing and freezing ice cream lowers manufacturers costs of producing chocolate ice cream.
Step by step solution
Step 1 of 3
The demand and supply of a good is a basic market mechanism to determine the equilibrium price and quantity. There are multiple factors that affect demand and supply, such as income, prices and supply of raw materials, new innovations, production techniques, change in the cost of production, change in preferences, and so on.