A shift in the supply curve of bicycles resulting from higher steel prices will lead to
A)higher prices of bicycles.
B)lower prices of bicycles.
C)a shift in the demand curve for bicycles.
D)larger output of bicycles.
E)no change in the price of bicycles.

Question

Quizplus · Accepted Answer

A shift in the supply curve caused by higher steel prices will lead to a decrease in the supply of bicycles, which will lead to an increase in the equilibrium price of bicycles. This is because at the higher price level, suppliers will be willing to supply more bicycles, while customers will demand fewer bicycles. Consequently, there will be an upward pressure on the price of bicycles as a result of the reduced supply.

A Shift in the Supply Curve of Bicycles Resulting from Higher