Which of the following would cause a decrease in the supply of milk?
A) An increase in the price of cookies (assuming that milk and cookies are complements).
B) A decrease in the price of milk.
C) An increase in the price of a product that producers sell instead of milk.
D) An increase in the number of firms that produce milk.

Question

Quizplus · Accepted Answer

An increase in the price of a product that producers sell instead of milk would lead to a decrease in supply of milk as producers would shift their resources towards producing the now more profitable product. The other answer choices do not directly impact the supply of milk.

Which of the Following Would Cause a Decrease in the Supply