A manufacturer of plastic canoes and fiberglass kayaks is experiencing an increase in the price of kayaks in the marketplace, while the price of oil used to make plastic is rising. These two events are MOST likely to lead to a(n)

Question

Quizplus · Accepted Answer

The increase in the price of kayaks will likely lead to an increase in the quantity supplied of kayaks, as producers are incentivized to supply more at higher prices. The rising price of oil, a key input for plastic canoes, will likely decrease the supply of canoes due to higher production costs.

A Manufacturer of Plastic Canoes and Fiberglass Kayaks Is Experiencing