If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

Question

Quizplus · Accepted Answer

When producers have to obtain higher prices to produce a given level of output, it means that the cost of production has increased. This can happen due to various reasons, such as an increase in the price of raw materials, labor, or other inputs. As a result, producers will offer less for sale at the existing prices, leading to a decrease in the quantity supplied at each price level. This shift in the supply curve to the left implies that producers need higher prices to produce the same quantity as before, hence causing an increase in equilibrium price and a decrease in equilibrium quantity. Therefore, the correct option is C) A decrease in supply.

If Producers Must Obtain Higher Prices Than Before to Produce