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Suppose We Observe an Increase in Both the Equilibrium Price

Question 124

Multiple Choice

Suppose we observe an increase in both the equilibrium price and quantity of bread. This is best explained by:


A) an increase in the cost of flour used in the production of bread.
B) a technological advance that lowers the marginal cost of producing bread.
C) a decrease in the price of butter, a complement to bread.
D) a decrease in the price of pasta, a substitute to bread.

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