A fall in the price of wheat fertilizer ________ the equilibrium price of wheat and ________ the equilibrium quantity of wheat.

Question

Quizplus · Accepted Answer

A fall in the price of wheat fertilizer decreases the cost of producing wheat, which can lead to an increase in supply. With more wheat available at a lower cost, the equilibrium price of wheat would decrease, but the equilibrium quantity of wheat would increase as producers are willing to supply more at lower prices and consumers are willing to buy more because of the lower prices.

A Fall in the Price of Wheat Fertilizer ________ the Equilibrium