Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread, and potatoes are a consumer substitute for bread, we would
Expect the price of wheat to

Question

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When the supply of wheat decreases, the price of wheat will rise due to the decrease in supply. As bread production heavily relies on wheat, the supply of bread will also decrease leading to an increase in price. Consumers, looking for a substitute for the now more expensive bread, will switch to potatoes thereby increasing the demand for potatoes.

Assume a Drought in the Great Plains Reduces the Supply