(Answered) I 2007 dairy farmers faced an equilibrium wholesale price

Economics

In 2007, dairy farmers faced an (equilibrium) wholesale price for their milk of about 1 cent per ounce. Because of changes in consumer preferences, the demand for milk has been declining steadily since then.

a. In the short run, what effect would this have on the price of milk? On the number of dairy farmers (and the size of dairy herds)? Explain.

b. What long-term prediction would you make for the price of milk?

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