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Homework answers / question archive / According to an article in the Wall Street Journal, both the quantity of organic milk sold and the price per half gallon have been falling

According to an article in the Wall Street Journal, both the quantity of organic milk sold and the price per half gallon have been falling

Economics

According to an article in the Wall Street Journal, both the quantity of organic milk sold and the price per half gallon have been falling. Source: Heather Haddon and Benjamin Parkin, "Dairies Are Awash in Organic Milk as Consumers Jump to Alternatives," Wall Street Journal, January 2, 2018. Briefly explain whether the scenario can account for this outcome. The demand for organic milk and the supply of organic milk have both been decreasing. This scenario A. accounts for the price and quantity of organic milk both falling, irrespective of the relative size of the shifts of supply and demand. B. can't account for the outcome of the price and the quantity of organic milk both falling because the quantity will always be higher in this scenario. C. can account for the price and quantity of organic milk both falling if the decrease in demand is small enough relative to the decrease in supply. D. can account for the price and quantity of organic milk both falling if the decrease in demand is large enough relative to the decrease in supply. The demand for organic milk and the supply of organic milk have both been increasing. This scenario A. can't account for the outcome of the price and the quantity of organic milk both falling because an increase in demand and supply will both push the price of organic milk higher. B. can't account for the outcome of the price and the quantity of organic milk both falling because an increase in demand and supply will both push the quantity of organic milk higher. C. can account for the price and quantity of organic milk both falling. D. can't account for the outcome of the price and the quantity of organic milk both falling because an increase in demand and supply will result in an ambiguous change (dependent on the relative size of the shifts in demand and supply) for the quantity of organic milk.

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