Which of the following is TRUE in the market for ice cream? A) An increase in the price of milk shifts the supply curve to the right

Economics Dec 17, 2020

Which of the following is TRUE in the market for ice cream?

A) An increase in the price of milk shifts the supply curve to the right.

B) A decrease in income shifts the demand curve for ice cream to the right.

C) An increase in number of sellers shifts the supply curve of ice cream to the right.

D) An increase in price of ice cream shifts the demand curve to the left.

Expert Solution

The answer is C An increase in the number of sellers increases the output supplied at every price and shifts the supply curve to the right. The Price of the good decreases in equilibrium and the quantity of the output increases.

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