An industry structure describes the number and size of participants (buyers and Sellers), technology, and the ease of entry and exist of firms. When the number of sellers is many, the industry is said to be competitive and hence a single seller is said to operate under condition of perfect competition. Suppose that McDonald Restaurant offers (Good X, Burger) and operates in a competitive market and uses Tomatoes as its main input. What would happen to the supply of Good X in each of the following situations. if the price of cheese increases.
If the price of cheese increases, then the cost of production will increase and supply will decrease.