Questions 1. Using demand and supply analysis, explain which factors have caused the price of milk to fall. 2. When inco

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Questions 1 Using Demand And Supply Analysis Explain Which Factors Have Caused The Price Of Milk To Fall 2 When Inco 1 (51.79 KiB) Viewed 39 times

Questions 1. Using demand and supply analysis, explain which factors have caused the price of milk to fall. 2. When incomes rise, the demand for milk does not really change. What does this suggest about the income elasticity of demand for milk and the type of product that it is? 3. If prices rise and sales also rise, does this suggest that British milk has an upward sloping demand curve? 4. If we do see little effect on the demand for milk following Morrisons 23p price rise, what conclusion can we come to about the price elasticity of demand? 5. Why do supermarkets and milk processors have the power to force down prices paid to dairy farmers? 6. What type of market structure do you think dairy farmers compete in? 7. If dairy farmers are unable to sell a litre of milk for a higher price than it costs to produce, is it a sensible strategy for them to remain in the market?