An increase in the price of an input will cause the
A) quantity supplied to decrease.
B) demand to decrease.
C) supply to decrease.
D) quantity supplied to increase.
E) demand to increase.

Question

Quizplus · Accepted Answer

An increase in the price of an input (such as labor or raw materials) will increase the cost of producing goods, causing a decrease in supply as producers are less willing and able to produce the same quantity of goods at the higher cost. This is represented by a leftward shift of the supply curve.

An Increase in the Price of an Input Will Cause