When the price of inputs increase:
A) the supply curve shifts down and to the right.
B) the supply curve shifts up and to the left.
C) there is an upward movement along the supply curve.
D) there is a downward movement along the supply curve.

Question

Quizplus · Accepted Answer

An increase in the price of inputs means that it now costs more to produce each unit of output. This reduces the profitability of production, so firms are willing to supply less at any given price, shifting the supply curve up and to the left.

When the Price of Inputs Increase