Suppose the input costs associated with manufacturing hair replacement treatments decrease over time. This would lead to:
A)an increase in the supply of such treatments, lower prices, and an increase in the equilibrium quantity.
B)a decrease in quantity supplied and lower prices.
C)an increase in demand and higher prices.
D)a decrease in the supply of such treatments, higher prices, and a decrease in the equilibrium quantity.

Question

Quizplus · Accepted Answer

When input costs decrease, it becomes cheaper for manufacturers to produce hair replacement treatments. As a result, they are able to supply more treatments at a lower price. This causes an increase in the supply of the treatments, leading to a decrease in equilibrium price and an increase in equilibrium quantity.

Suppose the Input Costs Associated with Manufacturing Hair Replacement Treatments