An increase in the supply of commodity X for any given price of X could be caused by
A)an increase in the prices of other commodities.
B)an increase in the prices of factors of production important to this commodity.
C)a reduction in the prices of factors of production important to this commodity.
D)an increase in consumer income.
E)none of the above.

Question

Quizplus · Accepted Answer

An increase in the supply of commodity X could be caused by a reduction in the prices of factors of production important to this commodity. When the prices of factors of production decrease, firms can produce more of the commodity at a lower cost, and hence can supply more of it at any given price. None of the other options listed would directly cause an increase in the supply of commodity X.

An Increase in the Supply of Commodity X for Any