Kremi Ice Cream Factory manufactures vanilla ice cream and chocolate ice cream. There are times when vanilla ice cream is eaten with sprinkles. Illustrate giving reasons for your answer what would happen to the demand for VANILLA ice cream in the situations below: (a) Government cuts wages by 10% (b) The price of chocolate ice cream increase (c) The price of sprinkles decreased (d) The price of vanilla ice cream decreased. (e) Government increased income tax. (f) More people moved into the community where Kris Kros is located.
Kremi Ice Cream Factory manufactures vanilla ice cream and chocolate ice cream. There are times when vanilla ice cream is eaten with sprinkles. Illustrate giving reasons for your answer what would happen to the demand for VANILLA ice cream in the situations below: (a) Government cuts wages by 10% (b) The price of chocolate ice cream increase (c) The price of sprinkles decreased (d) The price of vanilla ice cream decreased. (e) Government increased income tax. (f) More people moved into the community where Kris Kros is located.
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 6P
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Answer d, e and f use a diagram to illustrate for all three
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Step 1: Define demand and supply curves and equilibrium point
VIEWStep 2: Analyze the effect of a decrease in the price of vanilla icecream
VIEWStep 3: Analyze the effect of an increase in income tax by the government
VIEWStep 4: Analyze the effect of more people moving into the community
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