Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________, and the equilibrium quantity ________.

Question

Quizplus · Accepted Answer

When the price of flour increases, the cost of producing bagels goes up, leading to a decrease in supply. This results in a higher equilibrium price for bagels due to the reduced supply, and a lower equilibrium quantity as the higher price reduces demand.

Suppose That the Price of Flour Used to Produce Bagels