If the Price of Flour (P₂) Decreased to $1/lb, Draw

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The Answer is If the price of flour decreases to $1/lb, the equilibrium in the market will change. Assuming that the expenditure on flour is constant, the bakery will now be able to purchase more flour for the same amount of money. This means that the quantity of flour demanded by the bakery will increase, leading to a rightward shift in the demand curve for flour.

As for sugar, the decrease in the price of flour may also impact the demand for sugar. Since flour and sugar are often used together in baking, the decrease in the price of flour may lead the bakery to purchase more flour and subsequently increase their production of baked goods. This increase in production may also lead to an increase in the demand for sugar, as more sugar will be needed to maintain the same ratio of ingredients in the baked goods.

Therefore, the bakery will likely purchase more flour and more sugar as a result of the decrease in the price of flour. This is because the decrease in the price of flour has made it more affordable for the bakery to purchase, leading to an increase in the quantity demanded.

If the Price of Flour (P2) Decreased to $1/lb, Draw

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If the Price of Flour (P₂) Decreased to $1/lb, Draw