A rise in the price of a substitute in production for a good leads to
A) an increase in the supply of that good.
B) a decrease in the supply of that good.
C) no change in the supply of that good; instead there is a change in the quantity supplied.
D) a decrease in the quantity of that good supplied.
E) no change in either the supply or the quantity supplied of the good.

Question

Quizplus · Accepted Answer

A rise in the price of a substitute in production for a good makes it more expensive for producers to produce that good, incentivizing them to produce less of it. This leads to a decrease in the supply of that good.

A Rise in the Price of a Substitute in Production