Question

Select the correct answer.

The market demand for milk in Country X is 18 billion gallons per month, but the supply is 10 billion gallons per month.
What must happen in order to achieve market equilibrium?
O A
OB.
O C.
O D.
The monthly supply of milk must decrease by 28 billion gallons.
The monthly supply of milk must increase by 8 billion gallons.
The monthly supply of milk must increase by 28 billion gallons.
The monthly supply of milk must decrease by 8 billion gallons.

Answer 1

n order to achieve market equilibrium, where the quantity demanded equals the quantity supplied, the monthly supply of milk must increase by 8 billion gallons.

Step-by-step explanation:

In the given scenario, the market demand for milk in Country X is 18 billion gallons per month, but the supply is only 10 billion gallons per month. This means that the supply falls short of meeting the demand, resulting in a shortage of 8 billion gallons (18 billion - 10 billion = 8 billion).

To achieve market equilibrium, the supply needs to be increased to match the demand. In this case, the supply needs to be increased by 8 billion gallons (the shortage amount). By increasing the monthly supply of milk by 8 billion gallons, it will align with the market demand of 18 billion gallons, thus achieving market equilibrium.