Question

V. Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect:

Answer 1

Answer:

3. Supply of flour to increase.

Explanation:

The situation above is showing a direct proportional relationship between the "wheat," as a main ingredient of flour, and the flour itself.

If the price of wheat decreases, suppliers will be interested in buying more of it in order to produce more quantities of flour at a lower cost because it will more likely lead to a higher profit. This will, therefore, increase the supply of flour in the market.