Assume that steel is used to produce monkey wrenches.Ceteris paribus,if the price of steel rises,then
A)The supply curve for monkey wrenches will shift to the left.
B)The supply curve for monkey wrenches will shift to the right.
C)There will be a leftward movement along the initial supply curve for monkey wrenches.
D)There will be a rightward movement along the initial supply curve for monkey wrenches.

Question

Quizplus · Accepted Answer

When the price of a key input like steel rises, the cost of production increases. In the case of monkey wrenches, the cost of producing them will increase as well, causing the supply curve to shift to the left as producers will supply less of monkey wrenches at the same prices as before due to increased production costs.

Assume That Steel Is Used to Produce Monkey Wrenches