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A 2014 study conducted by Yahoo! revealed that chocolate is the most popular flavor of ice cream in America.
a. Suppose 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 chocolate ice cream. Indicate the possible effects on demand, supply, or both, as well as the equilibrium price and quantity of chocolate ice cream.
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Answers: 2
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