New Zealand sphagnum moss is an input used in the production of orchids.If the price of sphagnum moss increases, but nothing else changes, this will cause:

Question

Quizplus · Accepted Answer

An increase in the price of sphagnum moss, which is used in the production of orchids, will raise the cost of producing orchids. This will reduce the profitability of producing orchids and cause a decrease in the supply of orchids. As a result, the price of orchids will increase. However, this price increase will not lead to an increase in demand for orchids as the price of orchids has increased. Therefore, the best choice is B, which means the supply of orchids will decrease.

New Zealand Sphagnum Moss Is an Input Used in the Production