If the prices of the factors of production used to produce biscuits increase, _____.

Question

Quizplus · Accepted Answer

When the prices of the factors of production (such as flour, sugar, labor) increase, it becomes more expensive for companies to produce biscuits. As a result, companies will supply fewer biscuits at each price level, leading to a decrease in the supply of biscuits. This does not directly affect the quantity demanded or the demand for biscuits, nor does it cause an increase in the quantity supplied.

If the Prices of the Factors of Production Used to Produce