Select the phrase that correctly completes the following statement.'An increase in input prices caused a decrease in the supply of baseballs; as a result,________.'
A) the price of baseballs increased, and the demand for baseballs decreased
B) the equilibrium quantity of baseballs increased
C) the price of baseballs increased, and the quantity demanded of baseballs decreased
D) the price of baseballs increased. The higher price caused the supply of baseballs to increase.

Question

Quizplus · Accepted Answer

An increase in input prices usually leads to a decrease in supply, causing the price of the product to increase. This increase in price, in turn, leads to a decrease in quantity demanded. Therefore, the correct phrase to complete the statement is "the price of baseballs increased, and the quantity demanded of baseballs decreased" (choice C). None of the other options correctly reflect the impact of an increase in input prices on the supply and demand of baseballs.

Select the Phrase That Correctly Completes the Following Statement