Meat at the supermarket has contributed to increase in food prices in 2010, and high feed and fuel prices mean that steak will likely cost a lot more this fall. The price of feed has increased 50 percent and hay has doubled from two years ago. Based on this information, which of the following is NOT true in the market for beef?
A) The consumer surplus will decrease.
B) The equilibrium quantity will increase.
C) The total surplus will decrease.
D) The equilibrium price will increase.

Question

Quizplus · Accepted Answer

The equilibrium quantity will not increase; it is likely to decrease due to higher production costs leading to higher prices and reduced demand.

Meat at the Supermarket Has Contributed to Increase in Food