An increase in the price of plastic raises the cost of manufacturing DVDs. As a result, the market changes to a new equilibrium because of a(n):

Question

Quizplus · Accepted Answer

An increase in the price of plastic raises the cost of manufacturing DVDs, which implies an increase in the production cost of DVDs. As a result, producers would want to receive a higher price to cover the higher cost of production. This would lead to a leftward shift in the supply curve for DVDs since suppliers are now willing to supply fewer DVDs at each price level. It would result in a new equilibrium where the price of DVDs is higher, and the quantity demanded is lower than before the increase in production cost. Thus, the correct answer is D, a leftward shift in the supply curve for DVDs.

An Increase in the Price of Plastic Raises the Cost