Suppose the price of leather used to produce shoes increases.The higher price of leather ________ the supply of shoes and the supply curve of shoes ________.

Question

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When the price of leather used to produce shoes increases, it becomes more expensive for producers to make shoes. As a result, the cost of producing shoes increases, and the profit margins decrease for shoe manufacturers. Therefore, they will reduce the supply of shoes, meaning that they will produce fewer shoes at any given price. This decrease in supply leads to a leftward shift in the supply curve of shoes.

Suppose the Price of Leather Used to Produce Shoes Increases