Final answer:
If the price of wheat rises, the cost of producing bread increases, potentially leading to higher bread prices and decreased demand. Consumers may seek substitutes like corn flour, and producers might change their production levels based on price expectations.
Step-by-step explanation:
When considering the market for bread, if the price of wheat rises, it will have implications for both bread producers and consumers. The rise in wheat prices means that the cost of producing bread will increase. This could lead to a decrease in supply of bread as producers may not be able to produce the same quantity at the previous cost. Simultaneously, the higher production costs might be passed on to consumers in the form of higher prices for bread.
For consumers, the increase in the price of bread could lead to a decrease in demand, as some consumers may find the higher price discouraging and reduce their bread consumption. If wheat flour's price rises, people might also look for substitutes, such as corn flour. If corn flour prices were to increase, however, the demand for wheat flour could potentially go up, as it becomes a more attractive option compared to costlier substitutes.
Rising wheat prices can also affect producers' expectations. If producers expect these prices to continue rising, they may increase production to capitalize on the higher prices. However, if they expect prices to fall, they may hold off on expanding production to avoid potential losses.