Question

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

Answer 1

lower price

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.