Recall the example of increasing-cost industries such as sugar,at a price of 11 cents,the world supply of sugar equals the amount produced in the areas with low production costs.If the price of sugar increases what will happen in the sugar market?

Question

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As the price of sugar increases, producers in areas with higher production costs become more profitable, leading to an increase in the quantity supplied. Additionally, as the price of sugar increases, consumers may shift to consuming less sugar or finding substitutes, leading to a potential decrease in quantity demanded. However, the increase in quantity supplied due to producers in higher cost areas entering the market may offset the decrease in quantity demanded.

Recall the Example of Increasing-Cost Industries Such as Sugar,at a Price