Suppose We Observe an Increase in Both the Equilibrium Price

question 70

Multiple Choice

Suppose we observe an increase in both the equilibrium price and quantity of bread. This is best explained by:

• A)an increase in the cost of flour used in the production of bread.
• B)a technological advance that lowers the marginal cost of producing bread.
• C)a decrease in the price of butter, a complement to bread.
• D)a decrease in the price of pasta, a substitute to bread.

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Definitions:

Palestinians

People originally from the historical Palestine region, who may live in the West Bank, Gaza Strip, Israel, or as part of a global diaspora.

Iraqis

People originating from or associated with Iraq, a country in Western Asia.

Gulf War

A conflict that occurred in 1990-1991, initiated by Iraq's invasion of Kuwait, leading to a military intervention by coalition forces led by the United States.

Jihad

In Islam, a term referring to the spiritual struggle against sin; often misconstrued as solely relating to holy war.