Bicycles are made out of steel. If the price of steel increases, there is a shift in the supply curve of bicycles that leads to

Question

Quizplus · Accepted Answer

An increase in the price of steel, a key input in bicycle production, raises production costs for manufacturers. This typically leads to a decrease in supply (the supply curve shifts leftward), which, assuming demand remains constant, increases the equilibrium price of bicycles. This does not directly affect the demand curve for bicycles, nor does it necessarily lead to a surplus, as market forces will adjust to the new equilibrium.

Bicycles Are Made Out of Steel