University studies have shown that that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop. This leads to a reduction in feed costs of $60 million a year. In the chicken market, the
A) demand curve shifts to the right.
B) supply curve shifts to the right.
C) price will rise.
D) quantity sold will fall.

Question

Quizplus · Accepted Answer

Since the cost of production for chicken has decreased (due to reduction in feed costs), suppliers are able to supply more chicken at a lower cost. This leads to a rightward shift in the supply curve. The increase in supply leads to a decrease in equilibrium price (as demand remains constant) and an increase in quantity sold.

University Studies Have Shown That That Chickens Grow 2 Percent