Suppose we are considering the milk market and we have two sets of values, as shown by the numbers in parentheses, which represent two points on a line: (59 billion quarts; $4) and (78 billion quarts; $6).This line is most likely a
A)production possibilities frontier for milk.
B)supply curve for milk.
C)demand curve for milk.
D)ray through the origin.
E)time series line.

Question

Quizplus · Accepted Answer

The two sets of values represent a relationship between the quantity of milk supplied and the price of milk. As the quantity supplied increases from 59 billion quarts to 78 billion quarts, the price of milk increases from $4 to $6. This is the typical relationship shown by a supply curve, where a higher quantity supplied is associated with a higher price.

Suppose We Are Considering the Milk Market and We Have