Which factor will NOT cause an increase in the supply of good X?
A) an improvement in the technology used to produce good X
B) an increase in the number of firms that sell good X
C) an increase in the price of inputs used to produce good X
D) a decrease in the price of labour used to produce good X

Question

Quizplus · Accepted Answer

An increase in the price of inputs used to produce good X will cause the cost of production to increase, which in turn will decrease the profitability of producing good X. This, in turn, will decrease the supply of good X. Therefore, it will not cause an increase in the supply of good X.

Which Factor Will NOT Cause an Increase in the Supply