Suppose the price of wheat used in producing bread decreases. The equilibrium price of bread will decrease and the equilibrium quantity of bread will increase.

Question

Quizplus · Accepted Answer

When the price of the input (in this case, wheat) decreases, it reduces the cost of production for bread. This leads to an increase in the supply of bread, as producers can now offer more bread at the same price. As a result, the equilibrium price of bread will decrease and the equilibrium quantity of bread will increase.

Suppose the Price of Wheat Used in Producing Bread Decreases