Question

Ashley bakes bread that she sells at the local farmer’s market. If she purchases a new convection oven that reduces the costs of baking bread, the a. demand curve for Ashley’s bread will decrease. b. demand curve for Ashley’s bread will increase. c. supply curve for Ashley’s bread will increase. d. supply curve for Ashley’s bread will decrease.

Answer 1

Answer:

The correct answer is option c.

Explanation:

A reduction in the cost of producing bread will make it cheaper to bake breads. Ashley will now be able to bake more breads at the same cost. This will cause the production and supply of bread to increase. As a result, the supply curve will move to the right.

This rightward shift in the supply curve will further cause the price to decrease.