You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X.Refer to the above.An increase in the prices of resources used to produce X will:

Question

Quizplus · Accepted Answer

An increase in the prices of resources used to produce X will increase the cost of producing X for suppliers, resulting in a decrease in supply (S). This decrease in supply will lead to an increase in equilibrium price (P) as consumers compete for a smaller quantity of X, resulting in a decrease in equilibrium quantity (Q). Therefore, choice D is the correct answer.

You Are Asked to Determine, Other Things Equal, the Effects