Muffins and bagels are both delicious bakeries that can serve as substitutes for each other. If the price of bagels rises, the consumers would seek out the cheaper alternative option, which is muffins. This would result in a lower demand for bagels and thus a decrease in their sales.

The decrease in demand for bagels would in turn cause a decrease in the price of bagels. This is because when the demand for a certain item decreases, its production cost decreases as well, leading to a decrease in price. At the same time, the demand for muffins would increase, leading to a rise in their price. This means that the difference in the price between the two items would be larger than before.

In conclusion, a higher price for bagels would result in lower demand and a decreased price for bagels and an increased demand and increased price for muffins. This is because the two items are substitutes for each other and when the price of one increases, the demand for the cheaper alternative item increases as well.

What are the possible effects of a higher price for bagels?

1. People may purchase fewer bagels, leading to decreased sales for bagel vendors.

2. A higher price may incentivize other vendors to enter the bagel market, resulting in increased competition.

3. Consumers may choose alternative items instead of bagels, such as doughnuts or muffins.

4. Higher prices may encourage bagel vendors to invest in better quality ingredients, leading to improved taste and reputation.

5. Consumers may be more likely to purchase bagels for special occasions, leading to increased sales on holidays or other celebratory events.