All shredded wheat producers have decided to add a new ingredient, the "crunch enhancer" to shredded wheat. Crunch enhancer keeps cereals crisper longer in milk and, as a result, consumers decide they like shredded wheat more than before. What happens to the supply and demand curves for shredded wheat now that it costs more to produce and consumers like it better?

Question

Quizplus · Accepted Answer

The supply curve shifts leftward because the cost of production has increased due to the addition of the crunch enhancer. The demand curve shifts rightward because consumers now like shredded wheat more, increasing their demand.

All Shredded Wheat Producers Have Decided to Add a New