An increase in the price of plastic raises the cost of manufacturing VCRs. As a result, the market changes to a new equilibrium because of

Question

Quizplus · Accepted Answer

An increase in the price of plastic raises the cost of manufacturing VCRs, which means that it will become less profitable for suppliers to produce VCRs, causing a leftward shift in the supply curve. This shift will result in a higher equilibrium price and a lower equilibrium quantity of VCRs. Therefore, the correct answer is D, a leftward shift in the supply curve for VCRs.

An Increase in the Price of Plastic Raises the Cost