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Problems and Applications Q7

Oyster crackers are a complement for clam chowder. If the price of clam chowder falls, the quantity of clam chowder demanded

falls

rises

which

raises

lowers

the demand for oyster crackers. Because of the change in the equilibrium quantity of oyster crackers, the demand for wheat flour by oyster crackers producers

rises

falls

, causing the equilibrium price of wheat flour to

decrease

increase

. This means producers of bread face

higher

lower

input prices, and the supply of bread

decreases

increases

. The resulting

rise

fall

in the price of bread causes people to substitute

away from cereal and toward bread

away from bread and toward cereal

, so the demand for cereal

rises

falls

Answer :

TomShelby

Answer:

Q1 rises quantity of clam chowder demanded as there will be more demand from complement goods for Oyster crackers as theri price decreases it.

Q2 rises the quantity the demand for oyster crackers as more persons will find a consumer surplus at a lower price therefore, more quantity.

Q3 demand for wheat flour increases as they are an input in the processing of Oyster crackers.

Q4: increase as the demand increases without an increase in supply which,

Q5 increase input prices of bread making decreases it resulting in:

Q6: rise of the price of bread making people

Q7 subtitute with cereal thus,

Q8 increasing the demand for cerals.

Explanation:

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