Recall the example in the text of the increasing-cost sugar industry.At a price of 11 cents,the world supply of sugar equals the amount produced in the areas with low production costs.If the price of sugar increases,what will happen in the sugar market?

Question

Quizplus · Accepted Answer

As the price of sugar increases, sugar production becomes profitable in areas with higher production costs. This leads to an increase in the quantity supplied. Therefore, both choices A and C are correct. The increase in price may also lead to a decrease in quantity demanded, but this is not mentioned in the question.

Recall the Example in the Text of the Increasing-Cost Sugar