Consider the market for peanut butter.If there is an increase in the price of peanuts,
A) there is an upward movement along the supply curve for peanut butter.
B) the supply curve for peanuts shifts rightward.
C) there is a decrease in the supply of peanuts.
D) there is a decrease in the supply of peanut butter.
E) there is a decrease in the demand for peanut butter.

Question

Quizplus · Accepted Answer

An increase in the price of peanuts will increase the cost of production for peanut butter manufacturers, leading to a decrease in the supply of peanut butter. This is represented by a leftward shift of the supply curve for peanut butter. Therefore, the correct answer is D.

Consider the Market for Peanut Butter