Scenario 3-1:
Milk has an inelastic demand, and steak has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent.
1.Refer to Scenario 3-1. The change in equilibrium price will be
a. greater in the milk market than in the steak market.
b. greater in the steak market than in the milk market.
c. the same in the milk and steak markets.
d. unknown without more information.
2.Refer to Scenario 3-1. The change in equilibrium quantity will be
a. greater in the milk market than in the steak market.
b. greater in the steak market than in the milk market.
c. the same in the milk and steak markets.
d. unknown without more information.