3. The Market Forces of Supply and Demand
Using the Supply and Demand Curves to Find Equilibrium
Multiple Choice
Multiple ChoiceWhat happens in the market for cream cheese if (1) the price of butter, a substitute for cream cheese, falls and (2) the cost of milk, an input in cream cheese production, rises?
A
Equilibrium price rises, equilibrium quantity falls
B
Equilibrium price falls, equilibrium quantity falls
C
Equilibrium price ambiguous, equilibrium quantity rises
D
Equilibrium price ambiguous, equilibrium quantity falls
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