The new oven in Mr. Brown's bakery allows him to produce bread more efficiently and more cheaply. What is the MOST LIKELY effect
? A) the price drops and the quantity demanded decreases
Eliminate
B) the price rises and the quantity demanded decreases
C) the price drops and the quantity demanded increases
D) the price rises and the quantity demanded increases
The correct answer is C) the price drops and the quantity demanded increases.
The new oven in Mr. Brown's bakery allows him to produce bread more efficiently and more cheaply. The MOST LIKELY effect would be that the price drops and the quantity demanded increases.
This is what is about to happen for the following reasons. The new oven is going to help Mr. Brown to have better production of bread and more efficient. It would be cheaper so this can impact consumers prices in that Mr. Brown could sell his bread with better prices. When his clients see that he produces more bread with better prices, the clients are going to increase the purchase of bread, benefiting both, they as clients and Mr. Brown as the baker.
