Other things constant, an increase in the price of milk, used in the production of ice cream, will cause the supply curve for ice cream to shift to the left.

Question

Quizplus · Accepted Answer

An increase in the price of milk will raise the cost of production of ice cream, leading to lower profits or even losses for ice cream producers. As a result, producers will decrease the quantity supplied of ice cream at each price level, causing the supply curve to shift to the left.

Other Things Constant, an Increase in the Price of Milk