What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks?

Question

Business

Raymond Paul

20 July, 02:10

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks?

+1

Answers (1)

Know the Answer?

Janelle Riggs · Answer 1

high production cost and health issues will lead to a drastic decrease in the demand of latte milk there by decreasing the supply leading to increased equilibrium price.

Explanation:

equilibrium price is the price where the quantity of lattés demanded and the quantity supply are equal. the equilibrium price is use to strike balance between the consumers and the producer.

if the cost to produce steamed milk, which is used to make lattés, increased, its means the production cost has increased thereby increasing the price of making lattes. this will eventually lead to decreased in demand.

on the other hand, Scientists discovered that lattés cause heart attacks, this discovery will lead to a decreased in the demand of lattes by the consumers.

therefore, with this two cognate reason of:

high production cost will reduce the supply thereby increasing Equilibrium price

and health issues will lead to a drastic decrease in the demand of latte milk there by altering decreasing the supply and increasing the equilibrium price.