Brown sugar is an ingredient used to make churro waffles.
What happens to the price and quantity of churro waffles if the price of brown sugar decreases?

Choose 1 answer:
(A) Price increases; quantity does not change.
(B) Price increases; quantity increases.
(c) Price decreases; quantity increases.
(D) Price increases; quantity decreases.
(E) Price decreases; quantity decreases.

Question

Brown sugar is an ingredient used to make churro waffles.
What happens to the price and quantity of churro waffles if the price of brown sugar decreases?

Choose 1 answer:
(A) Price increases; quantity does not change.
(B) Price increases; quantity increases.
(c) Price decreases; quantity increases.
(D) Price increases; quantity decreases.
(E) Price decreases; quantity decreases.

Accepted Answer

∻Solution∻ ‖ a ⋮ Decrease in Input Cost: When the price of an input (brown sugar) decreases, the cost of production for churro waffles decreases. This is represented by a downward shift in the supply curve. ‖ ‖ b ⋮ Supply Curve Shift: The decrease in production cost causes the supply curve for churro waffles to shift to the right, indicating an increase in supply. ‖ ‖ c ⋮ Equilibrium Price and Quantity: With an increased supply, the new equilibrium will be at a lower price and a higher quantity, assuming demand remains constant. ‖ ∻Answer∻ ⚹ (C) Price decreases; quantity increases. ⚹ ∻Key Concept∻ ⚹ Supply and Demand Shifts ⚹ ∻Explanation∻ ⚹ A decrease in the price of an input like brown sugar reduces production costs, leading to an increase in supply. This results in a lower equilibrium price and a higher equilibrium quantity for churro waffles. ⚹◊What is the relationship between the price of brown sugar and the supply curve of churro waffles in a competitive market?⍭ Generate me a similar question◊

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