A change in the quantity demanded of chocolate, a factor of production used to produce chocolate-covered peanuts, will occur if:
A) the price of chocolate increases.
B) the price of chocolate-covered peanuts increases.
C) the demand for chocolate-covered peanuts decreases.
D) a new, improved chocolate-covered-peanut-making machine is purchased by candy companies.

Question

Quizplus · Accepted Answer

An increase in the price of chocolate, a factor of production used to produce chocolate-covered peanuts, will lead to an increase in the cost of production of chocolate-covered peanuts. This increase in cost will result in a decrease in the quantity demanded of chocolate-covered peanuts, as companies will be less willing to produce them at a higher cost. Therefore, a change in the quantity demanded of chocolate-covered peanuts will occur due to a change in the price of chocolate. The other choices may have an impact on the demand for chocolate-covered peanuts but will not directly affect the quantity demanded of chocolate, the factor of production.

A Change in the Quantity Demanded of Chocolate, a Factor