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Suppose that the bakers of bread face an increase in the price of flour (an input). In the market for bread, this will cause

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Answer #1

Ans: Supply of bread to decrease ; increase.

Explanation:

When price of flour increases, the cost of production of bread will increase. So, supply of bread will decrease which will lead to leftward shift in supply curve of bread. So, the new equilibrium price will increase.

Thus, option [c] is correct answer.

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