As the price of flour (an input in the cookie production process)increases,firms that produce cookies will
A) increase the supply of cookies.
B) increase the quantity of cookies supplied.
C) decrease the supply of cookies.
D) decrease the quantity of cookies supplied.
E) leave their production unchanged.

Question

Quizplus · Accepted Answer

An increase in the price of an input, such as flour, will increase the cost of production for firms that produce cookies. As a result, firms are likely to decrease their supply of cookies, shifting the supply curve to the left. This would be represented as a decrease in the quantity of cookies supplied at every given price level.

As the Price of Flour (An Input in the Cookie