One factor inuencing a rm's decision on how much of a good or service to produce is the price of a substitute or complement in production. Substitutes in production are goods that can be produced using the same resources. For example, a farmer can choose to plant oranges or mangos. Complements in production are goods that are jointly produced using a given resource. For example, a lumber mill produces two-by-fours and sawdust in the same production process. 10. Suppose the government purchases a large amount of cheese from dairy farmers. What would happen to the equilibrium price and quantity of milk? Assume that consumers do not View cheese and milk as substitutes or complements. a) The equilibrium price and quantity of milk would increase. b] The equilibrium price and quantity of milk would decrease. c) The equilibrium price of milk would increase and the quantity would decrease. d] The equilibrium price of milk would decrease and the quantity would increase. For Your Consideration: Historically, the U.S. government has purchased and stored large amounts of dairy items in order to support the dairy industry.3 The farmers themselves also have ways of keeping the price of dairy items articially high, including simply dumping out millions of gallons of milk.4