Tuesday, April 22, 2008

Unit 1: Increasing costs of production and the supply of flour

This BBC clip shows the impact on supply of an increase in raw material prices

http://news.bbc.co.uk/1/hi/business/7361412.stm

a) Using a diagram, explain how the increasing price of wheat leads to an increase in the price of flour
b) Do you think the supply of wheat is elastic or inelastic? Explain tour answer

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