Which of the following would cause a decrease in the supply of milk?
A)an increase in the price of cookies (assuming that milk and cookies are complements)
B)a decrease in the price of milk
C)an increase the price of a product that producers sell instead of milk
D)an increase in the number of firms that produce milk

Question

Quizplus · Accepted Answer

When the price of a product that producers can sell instead of milk increases, it becomes more profitable for them to allocate their resources towards producing that product instead of milk. This results in a decrease in the supply of milk as fewer resources are dedicated towards producing milk. The other choices do not directly impact the supply of milk in this way.

Which of the Following Would Cause a Decrease in the Supply