Figure 4.5
-Figure 4.5 illustrates the supply of guitars.An increase in the price of rosewood,which is used to make guitars,would most likely cause a movement from

Question

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An increase in the price of rosewood, which is used to make guitars, would increase the cost of production for guitar makers. As a result, they would decrease their supply of guitars at each possible price level. This would cause the supply curve to shift to the left. Therefore, the most likely movement would be from S1 to S2.

Figure 4.5 -Figure 4.5 Illustrates the Supply of Guitars.An Increase in the in the Price