There was a notable change in the bagel market in 2018. Historically peak demand had been around events like the Super Bowl. But with more and more people eating bagels at brunch on weekends, consumption also increased at other times of the year. This led to higher prices.

According to WSJ, the wholesale price of a 25-pound box went from $37 in July 2017 to $84.25 a year later.

a. Explain using supply and demand analysis from the first week of the course why bagel prices went up.

b. How will bagel producers react to the higher prices in the short run?

c. What might we expect to happen to the price & consumption of bagels in the long run? 2022?