A local bakery has been producing 100 loaves of bread per day, which is the maximum it can produce without wasting resources. However, due to a new tax on flour, the bakery is now only able to produce 80 loaves per day, leading to higher prices. Which of the following statements best describes the situation?

In this situation, the bakery's ability to produce bread has decreased from its optimal level of 100 loaves to a sub-optimal level of 80 loaves due to the new tax on flour. Optimal outcomes occur when resources are used efficiently, maximizing production without waste, while sub-optimal outcomes mean that resources are not being used to their full potential. The bakery is now facing a scenario where it cannot meet demand fully, leading to higher prices for bread, which is a common result when supply decreases. For example, if the bakery was selling each loaf for $2 when producing 100 loaves, the price might increase to $2. 50 or more now that they can only produce 80 loaves, reflecting the scarcity caused by the tax.