Scenario 5-4
Milk has an inelastic demand,and beef has an elastic demand.Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent.
-Refer to Scenario 5-4.The equilibrium quantity will
A)increase in both the milk and beef markets.
B)increase in the milk market and decrease in the beef market.
C)decrease in the milk market and increase in the beef market.
D)decrease in both the milk and beef markets.

Question

Quizplus · Accepted Answer

With a decrease in the population of dairy cows and beef cattle, the supply of both milk and beef will decrease. Since milk has inelastic demand, the decrease in supply will lead to a decrease in equilibrium quantity. For beef, which has elastic demand, the decrease in supply will also lead to a decrease in equilibrium quantity.

Scenario 5-4 Milk Has an Inelastic Demand,and Beef Has an Elastic Demand.Suppose