Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, what would we expect?

Question

Quizplus · Accepted Answer

An increase in the price of wheat, the main input in flour production, will increase the cost of production for flour. This will lead to a decrease in the supply of flour, as producers will need to charge a higher price for the same quantity of flour to cover their increased costs. Therefore, we would expect the supply of flour to decrease.

Wheat Is the Main Input in the Production of Flour