Recall Application 2, "Honeybees and the Price of Ice Cream," to answer the following questions:
-Using supply and demand analysis, the increase in the price of ice cream can be illustrated as:

Question

Quizplus · Accepted Answer

An increase in the price of honey, a key ingredient in the production of ice cream, will increase the cost of production for ice cream manufacturers. As a result, the supply curve for ice cream will shift to the left, resulting in less ice cream being supplied at each price. This will lead to a higher equilibrium price and a lower equilibrium quantity of ice cream being consumed. Therefore, the correct answer is B, a leftward shift in the supply curve for ice cream caused by more expensive ingredients.