The price of chocolate chips has increased.For the producers of chocolate chip cookies,this means:

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An increase in the price of chocolate chips means that it costs more for the producers of chocolate chip cookies to produce each cookie. Therefore, they will be less willing and able to supply as many cookies at each price, as their costs have gone up. Option A is incorrect because the increase in price does not necessarily mean that competition will drop out. Option C is incorrect because it suggests that the increase in a main input (chocolate chips) actually makes it easier or cheaper for producers to supply cookies. Option D is also incorrect because more competition would actually make it more difficult for individual producers to supply more cookies at each price.

The Price of Chocolate Chips Has Increased