If Japan's economy is subject to increasing costs, then its supply curve of automobiles will be:
A) downward sloping.
B) upward sloping.
C) horizontal.
D) vertical.
E) indeterminate.

Question

Quizplus · Accepted Answer

An upward sloping supply curve reflects the principle that as the price of a good increases, producers are willing to supply more of it, which is a fundamental concept in economics. Increasing costs would shift the supply curve to the left, indicating a decrease in supply at each price level, but it does not change the basic upward slope of the supply curve.

If Japan's Economy Is Subject to Increasing Costs, Then Its