Effects of supply and demand shocks on the market for milk Consider the market f

Question

Effects of supply and demand shocks on the market for milk Consider the market for milk. For each of the following events, state (a) whether it affects supply or demand (or both, or neither), (b) which direction supply/demand shifts, (c) the effect on price, and (d) the effect on quantity. 1. Consumer income rises, and milk is a normal good. 2. The cost of feed for dairy cows increases. 3. The price of cereal, a complement, rises. 4. Wages paid to dairy farm workers increase. 5. Technology used to produce milk becomes more efficient.

Explanation / Answer

ec.europa.eu/agriculture/analysis/external/milk/full_text_en.pdf

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