What is the effect of an increase in the price of a resource?
A)It will cause a decrease in the supply of the product.
B)It will cause an increase in the supply of the product.
C)It will cause a decrease in the demand for the product.
D)It will cause an increase in the demand for the product.

Question

Quizplus · Accepted Answer

An increase in the price of a resource will cause a decrease in the supply of the product because it raises the production costs, making it less profitable to produce, hence suppliers will produce less.

What Is the Effect of an Increase in the Price