A decrease in the price of peanuts will cause a leftward shift the supply curve of peanut butter.

Question

Quizplus · Accepted Answer

The price of peanuts is a determinant of the supply of peanut butter, not the demand for it. Therefore, a decrease in the price of peanuts will not cause a shift in the supply curve of peanut butter but rather a movement along the supply curve. Specifically, it will cause an increase in the quantity supplied of peanut butter, as producers will find it more profitable to produce peanut butter at the lower input cost.

A Decrease in the Price of Peanuts Will Cause a Leftward