Suppose the price of oil has recently increased, making it more expensive to manufacture ride-on lawn mowers. This oil price increase also makes it more expensive to run a ride-on mower. What factors of demand and/or supply are affected by the changing price of oil?
A) Price of related good, expectations of future prices
B) Price of related good, price of input
C) Price of input, income
D) Price of input, number of buyers

Question

Quizplus · Accepted Answer

The changing price of oil affects the price of input (oil for manufacturing and fuel for running), which in turn affects the supply of ride-on lawn mowers. As the input costs increase, the supply of ride-on mowers is likely to decrease and the price may rise. The price of related goods, expectations of future prices, income, and number of buyers are not directly affected by the changing price of oil in this scenario.

Suppose the Price of Oil Has Recently Increased, Making It