Question

Which of the following is the best description of the effects of an increase in the supply of bread?

a) Consumers will pay more for bread
b) Bread prices will fall, and bread sales will rise
c) A permanent surplus of bread will remain on the market
d) Bakers will have higher marginal costs

Answer 1

b) Bread prices will fall , and bread sales will rise

Answer 2

B. Bread prices will fall, and bread sales will rise.

Step-by-step explanation:

When the supply of bread increases, there is more bread available on the market. This increase in supply frequently results in a fall in prices, as bakers may reduce prices to encourage people to buy more bread. Bread becomes more affordable as a result, increasing demand and sales. Price pressure and increasing sales are typical market reactions to an increase in supply.