Question

Suppose that in the price of corn feed used to raise pigs increases. what will happen in the market for bacon?

Answer 1

Bacon would cost more since it would cost more to raise a pig

Answer 2

Answer: The price for bacon will increase.

Explanation:

If the cost of production or any factor of production such as labor, raw materials, equipment increases, the quantity that producers are willing to supply at a given price decreases and this will increase the price of finished products. From the question, The price of Bacon will skyrocket since the price of feeds used to feed the pigs are increased.

Because if the cost of production increase, prices will increase as well because the producers are spending more money to make that product.

They are spending more money than they usually do to feed the pigs, this will make them sell the pigs at a higher price and when those that makes bacons purchase at this high price, they will at a higher rate than they used to, to consumers.