All Shredded Wheat Producers Have Decided to Add a New

question 42

Multiple Choice

All shredded wheat producers have decided to add a new ingredient to shredded wheat, the "crunch enhancer." Crunch enhancer keeps cereals crisper longer in milk and, as a result, consumers decide they like shredded wheat more than before. What happens to the supply and demand curves for shredded wheat now that is costs more to produce and consumers like it better?

• A) The supply curve shifts rightward and the demand curve doesn't shift.
• B) The supply curve shifts leftward and the demand curve shifts rightward.
• C) The supply and demand curves both shift rightward.
• D) The supply curve shifts leftward and the demand curve doesn't shift.

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Definitions:

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