Dairies make low-fat milk from full-cream milk. In the process
Dairies make low-fat milk from full-cream milk. In the process of making low-fat milk, the dairies produce cream, which is made into ice cream. In the market for low-fat milk, the following events occur one at a time:
(i) The wage rate of dairy workers rises.
(ii) The price of cream rises.
(iii) The price of low-fat milk rises.
(iv) With the period of low rainfall extending, dairies raise their expected price of low-fat milk next year.
(v) With advice from health-care experts, dairy farmers decide to switch from producing full cream milk to growing vegetables.
(vi) A new technology lowers the cost of producing ice cream.