Which of the following increases the supply of a product?

Question

Quizplus · Accepted Answer

Lower prices for resources used to produce the product will decrease production costs, allowing producers to produce more of the product at a lower price. This lowers the minimum price at which producers are willing to sell the product, resulting in an increase in the supply of the product.

Answer: D
 An increase in the expected future price of the product may lead producers to hold on to their current supplies in the hopes of selling them at a higher price in the future. However, in the short term, this will reduce the supply of the product. Therefore, this answer choice is incorrect.

Answer: E
 A higher price for the product may incentivize producers to produce more of the product to earn higher profits. However, it does not increase the actual supply of the product. Therefore, this answer choice is incorrect.

Answer: A
 Some producers going bankrupt and leaving the industry reduces the number of producers in the market, leading to a decrease in the supply of the product. Therefore, this answer choice is incorrect.

Answer: C
 A decrease in productivity may lead to a decrease in the supply of the product if producers are unable to produce as much of the product with the same amount of resources. Therefore, this answer choice is incorrect.

Which of the Following Increases the Supply of a Product