When sawmills cut logs to produce lumber, they also use the sawdust and scrap wood to produce sheets of particle board. If the price of lumber begins to fall, how would this affect the supply of lumber and particle board?

Question

Quizplus · Accepted Answer

When the price of lumber falls, the quantity of lumber supplied decreases because producers are less willing to supply lumber at lower prices. Consequently, less sawdust and scrap wood are produced, leading to a decrease in the supply of particle board, shifting its supply curve to the left.

When Sawmills Cut Logs to Produce Lumber, They Also Use