Supply and Demand

Scenario 4: Farmers and ranchers switch from milk production (dairy cows) to beef production (beef cattle).

1. Based on Scenario 4, the supply curve for milk

	shifts to the right.
	shifts to the left.
	does not shift.

That's incorrect. Farmers and ranchers switching from milk production (dairy cows) to beef production (beef cattle) would cause the supply curve for milk to shift to the left. The correct answer is B.

That's correct. Farmers and ranchers switching from milk production (dairy cows) to beef production (beef cattle) would cause the supply curve for milk to shift to the left.

Scenario 4: Farmers and ranchers switch from milk production (dairy cows) to beef production (beef cattle).

2. Based on Scenario 4, which factor caused the change in supply?

	A change in the costs of inputs to the production process
	A change in technology
	A change in the number of producers in the market
	Government policies
	Expectations of future prices
	A change in the price of other goods produced by a firm
	A change in the price of milk

That's incorrect. Farmers and ranchers switching from milk production (dairy cows) to beef production (beef cattle), is a change in the number of producers in the market. The correct answer is C.

That's correct. Farmers and ranchers switching from milk production (dairy cows) to beef production (beef cattle), is a change in the number of producers in the market. The correct answer is C.

For the following scenario in the milk market, identify the type and cause of change. Note that these scenarios are asking about producer behavior—supply and quantity supplied.