What will happen to the market of milk shake??

Question

If there is a worldwide surplus of cream?

Answer 1

The price of the milk shake would go down then, probably.  If there's a surplus of cream, the cream industry would lower their prices on cream because they have so much left over and need to find a way to get people to buy more of it.  Therefore, the cream industry would drop the price of cream, and the milkshake industry (which uses cream) could either:

A. Keep the price of milkshakes the same and make more profit

B. Lower the price of milkshakes, get more customers, and potentially make profit.

So, the market for milk shakes would presumably do well if the price of cream drops.