Question

Select the correct answer.

The market demand for milk in Country X is 18 billion gallons per month, but the supply is 10 billion gallons per month. What must happen in order to achieve market equilibrium?
Group of answer choices
The monthly supply of milk must decrease by 28 billion gallons.
The monthly supply of milk must increase by 8 billion gallons.
The monthly supply of milk must increase by 28 billion gallons.
The monthly supply of milk must decrease by 8 billion gallons.

Answer 1

Answer: The monthly supply of milk must increase by 8 billion gallons.

Explanation: The existing market supply of milk is 10 billion gallons per month, but it needs to be 18 billion per month because this is how much is demanded (demand). This means you need to add 8 billion gallons per month [produced], because 10 + 8 = 18 billion gallons of milk per month.