1 - MyP.Le EC133C ProblemSet3PartIV

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My P. Le EC 133 -C Problem Set 3 – Part IV 1.    A survey indicated that vanilla ice cream is America's favorite ice-cream  flavor. For each of the following, indicate the possible effects on demand and/or  supply and equilibrium price and quantity of vanilla ice cream.  a. The discovery of cheaper synthetic strawberry flavoring lowers the price of  strawberry ice cream.  b. A new report by the American Medical Association reveals that vanilla may  contribute to lower cholesterol.  c. New technology for mixing and freezing ice cream lowers manufacturers’ costs  of producing vanilla ice cream.  The decrease in manufacturers’ costs of producing vanilla ice cream will lead to a  rise in the supply of vanilla ice cream. The supply curve shifts to the right.
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d. A severe drought in the Midwest causes dairy farmers to reduce the number of  milk producing cattle in their herds by a third. These dairy farmers supply cream  that is used to manufacture vanilla ice cream. 2.   Suppose that the demand and supply schedules for Maine lobsters in the 
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This note was uploaded on 10/27/2011 for the course ECON 125 taught by Professor Diannelabert during the Spring '11 term at Hamilton College.

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1 - MyP.Le EC133C ProblemSet3PartIV

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