The product is a normal product.

-All of the following except one will cause the supply of a product to increase.Which is the exception?
A)A decrease in the price of a substitute in production.
B)An increase in business taxes.
C)The expectation of suppliers that the future price of the product will be lower.
D)A decrease in the price of resources.
E)An improvement in technology.

Question

The product is a normal product.
 
-All of the following except one will cause the supply of a product to increase.Which is the exception?
A)A decrease in the price of a substitute in production. 
B)An increase in business taxes. 
C)The expectation of suppliers that the future price of the product will be lower. 
D)A decrease in the price of resources. 
E)An improvement in technology.

Quizplus · Accepted Answer

An increase in business taxes will lead to higher production costs, which will discourage suppliers from producing more of the product, thus decreasing the supply. The other choices, such as a decrease in the price of resources, an improvement in technology, or the expectation of lower future prices, will encourage suppliers to produce more of the product, which will increase the supply. A decrease in the price of a substitute in production may also increase the supply since it will make the production of the product more profitable.

The Product Is a Normal Product