If producers must receive a higher price to be induced to produce any quantity, we can conclude that
A) supply decreased.
B) demand decreased.
C) both supply and demand increased.
D) demand increased.

Question

Quizplus · Accepted Answer

When producers must receive a higher price to produce any quantity, it indicates that the cost of production has increased or the supply of factors of production needed to produce the good has decreased. This results in a decrease in supply, as producers are only willing to supply at the higher price. Therefore, the correct answer is A) supply decreased.

If Producers Must Receive a Higher Price to Be Induced