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Glossary
Knowledge Check - Scenario 3

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.


Scenario 3: The price of feed for milk cows drops to a new low.

1. Based on Scenario 3, the supply curve for milk

shifts to the right.

shifts to the left.

does not shift.

 
Scenario 3: The price of feed for milk cows drops to a new low.
 
2. Based on Scenario 3, 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