Economics (PDG 34/12)

Unlimited wants (Many people want different flavoured-yoghurt)

Subtopic

Limited resources (Cost of Milk is rising)
(Capital)
(Manpower)

Set up yoghurt ice cream store

Go to University

Opportunity cost is a better education and higher paying job

Factors of Production increase -> Considering that price of output remains unchanged, profit earned will be lower -> Unwilling to produce -> Drop in supply

Since the only production of yoghurt icecream is us -> Small size of industry -> Supply will not decrease, but it will not be as high as

Many other substitutes (Goods in competitive demand) -> if there is increase in price of yoghurt ice cream due to increased FOP -> consumers turn to substitutes -> Drop in Demand

Since milk is a complement of yoghurt ice cream (Goods in joint demand) -> increase in price of milk -> increase in price of yoghurt ice cream (to maintain same profit)-> drop in demand

Since yoghurt ice cream can reduce possibility of high blood pressure and is beneficial to one's health ->consumers willing to try it out (Taste and Preferences)-> Demand increase

Yoghurt ice cream is a normal good -> With increase in Income -> Consumers have better ability and are more willing to pay-> Demand for the normal good will increase as well