Dan owns one of the many bakeries in New York City. Which of the following events will lead to an increase in Dan's demand for the services of bakers? (i)
The price of muffins increases. (Muffins are Dan's specialty.)
(ii)
Dan adds three new ovens to the kitchen area to help the bakers work faster.
(iii)
Local bakers form a union to protect themselves from low wages.
A)(i) and (ii) only
B)(ii) and (iii) only
C)(i) and (iii) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

Only (i) and (ii) would lead to an increase in Dan's demand for the services of bakers. A price increase for Dan's specialty, muffins, would likely make them a more profitable item, leading Dan to want more bakers to bake more muffins to sell. Adding new ovens to the kitchen area would only increase Dan's ability to produce muffins, again leading to an increased demand for bakers. The formation of a union by local bakers is unlikely to impact Dan's demand for bakers, as it does not directly affect his bakery.

Dan Owns One of the Many Bakeries in New York