Figure 4-16

-Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from
A) S1 to S₂.
B) S₂ to S1.
C) S₂ to S₃.
D) S1 to S₃.

Question

Figure 4-16
 
-Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from
A) S1 to S₂. 
B) S₂ to S1. 
C) S₂ to S₃. 
D) S1 to S₃.

Quizplus · Accepted Answer

An increase in the price of syrup used in the production of soda would increase the cost of production, which would cause a decrease in supply. Thus, the supply curve would shift to the left. In Figure 4-16, this would result in a shift from S2 to S1. Hence, the correct answer is B.

Figure 4-16 -Assume That Figure 4-16 Shows the Supply of Soda.An Increase