Final answer:
The repeal of a law restricting wheat growth in the US would likely lead to an increase in the supply of wheat, as farmers could grow more without facing legal constraints. This increase in supply typically shifts the supply curve to the right and could result in lower wheat prices to clear the surplus and reach a new market equilibrium.
Step-by-step explanation:
When the government repeals a law that has restricted the amount of wheat that can be grown in the United States, this would very likely cause an increase in the supply of wheat. Restrictions on production limit the quantity of wheat that producers can supply to the market. When these restrictions are lifted, farmers are able to grow more wheat, which leads to a rise in supply given other factors remain constant.
According to basic principles of supply and demand, when the market is at equilibrium and then the supply increases, the supply curve shifts to the right. If demand stays constant, the increased supply would lead to a surplus if prices remained the same. However, in a free market, the surplus would typically lead to a decrease in price, returning the market towards equilibrium. The ability to grow more wheat without legal restrictions often leads to greater quantities being supplied at a lower price.
As an example, consider a situation where markets are initially in equilibrium, but then the price is artificially decreased or increased, leading to either a shortage or surplus. In the case of a surplus, producers may lower prices to stimulate demand and reduce their excess stock. Similarly, if the government had previously been maintaining a price above the market equilibrium, leading to a surplus, removing this price support would see prices fall to the natural equilibrium, increasing the amount of wheat sold.
Therefore, the scenario described, where a government repeal allows for more wheat to grow, supports the concept that the supply of wheat would increase.