Which of the following does not explain why supply curves typically slope upward and to the right:
A)people are willing to pay a higher price for more goods.
B)extra production brings in the less efficient, higher-cost producers.
C)expanded industry output might cause a labor shortage and subsequently a rise in the wage rate and the cost of production.
D)expanded production may require the use of inferior resources.
E)All the above are valid reasons.

Question

Quizplus · Accepted Answer

The supply curve slopes upward because, as the price increases, producers are willing to supply more of the good, not because people are willing to pay more. Choices B, C, and D all relate to the increasing costs associated with increasing production, which is why the supply curve slopes upward.

Which of the Following Does Not Explain Why Supply Curves