Question

An increase in the price of wheat, an important ingredient in the production of bread, combined with an increase in the number of people consuming bread, will result in which of the following changes in the bread market?

Answer 1

An increase in a price of a good will usually cause a decrease in quantity demanded. Always opposites. If price decreases, quantity demanded will increase. Same thing with supply; If quantity supplied increases, price, as well as demand, will decrease.