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

Question

Quizplus · Accepted Answer

An increase in the number of firms that produce peanut butter would lead to an increase in the supply of peanut butter as more firms enter the market and compete with each other to sell their products.

Which of the Following Would Cause an Increase in the Supply