An increase in the price of an input will increase the _____ of producing the final good and shift the supply curve of the commodity _____.

Question

Quizplus · Accepted Answer

An increase in the price of an input will increase the marginal cost of producing the final good because it becomes more expensive to produce each unit of output. This will shift the supply curve of the commodity upward as producers will need to charge higher prices to cover their increased costs.

An Increase in the Price of an Input Will Increase