Suppose that lower production costs increases the supply of wheat, such that more wheat is supplied at each pnce level. The new equilibrium price (after the increase in supply) is

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Mathematics

Erica Pineda

1 December, 23:02

Suppose that lower production costs increases the supply of wheat, such that more wheat is supplied at each pnce level. The new equilibrium price (after the increase in supply) is

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Kevin Joyce · Answer 1

lower price

Step-by-step explanation:

Pricing occurs through the interaction between supply and demand for a product. When supply increases, price tends to decrease to attract higher demand. This occurs when the cost of wheat production decreases and a larger quantity is offered at a lower price, so that the production is completely sold. This is a basic determinant of the law of supply and demand, whereby the increase / decrease in the quantity supplied causes a decrease / increase in the price of the product.