If the price of steel, a primary input used in manufacturing automobiles, rises, the supply curve for the automobile industry will _____.

Question

Quizplus · Accepted Answer

When the price of a primary input like steel increases, the cost of manufacturing automobiles also increases. This typically leads to a decrease in the supply of automobiles, as it becomes more expensive for companies to produce the same quantity of cars. Therefore, the supply curve for the automobile industry will shift to the left, indicating a decrease in supply at every price level.

If the Price of Steel, a Primary Input Used in Manufacturing