Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?
A)A decrease in the price of flour.
B)An increase in the price of flour.
C)An increase in the price of rye bread, a substitute for white bread.
D)An increase in the price of butter, a complement for white bread.

Question

Quizplus · Accepted Answer

A decrease in the price of a key input, such as flour, would lower the cost of production for white bread. This allows producers to lower their selling price to consumers while still making a profit, thereby causing the equilibrium price of white bread to decrease. With the lower selling price, consumers would likely demand more white bread, leading to an increase in the equilibrium quantity of white bread.

Which of the Following Would Cause the Equilibrium Price of White