The graph below shows how the price of wheat varies with the demand quantity.
Price
Decrease...
The graph below shows how the price of wheat varies with the demand quantity.
Price
Decrease Supply
New
Supply
Supply
$5
$4
Demand
400 600 Quantity
Suppose that an increase in production costs decreases the supply of wheat, such that less wheat is supplied at each
price level. The new equilibrium price (after the decrease in supply) is
$4
$5
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