What will result from an increase in resource costs to firms in a market?

Question

Quizplus · Accepted Answer

An increase in resource costs will lead to a decrease in supply, shifting the supply curve to the left. This will result in an increase in equilibrium price and a decrease in equilibrium quantity. Option D is the only choice that reflects this outcome. Options A and B are incorrect because they incorrectly predict a decrease in equilibrium price. Option C is incorrect because it predicts no change in equilibrium quantity, which is not a likely outcome when there is a decrease in supply.

What Will Result from an Increase in Resource Costs to Firms