An increase in the price of steel to producers of refrigerators will cause
A)the quantity demanded for steel to increase.
B)the demand for refrigerators to decrease.
C)the quantity supplied of refrigerators to increase.
D)the supply curve for refrigerators to shift left.

Question

Quizplus · Accepted Answer

An increase in the price of steel will increase the cost of production for refrigerators, causing a decrease in the supply of refrigerators. This will shift the supply curve for refrigerators to the left. The quantity demanded for steel may increase, but it is not directly related to the demand for refrigerators. The demand for refrigerators may also decrease due to the increase in price, but this is a result rather than a cause of the shift in supply. The quantity supplied of refrigerators may increase if there is excess supply due to decreased demand, but this is not a direct result of the increase in the price of steel.

An Increase in the Price of Steel to Producers of Refrigerators