Flour is an input used to produce cookies. Suppose that the price of flour rises. As a result
A) the supply curve for flour will shift to the right.
B) the supply curve for flour will shift to the left.
C) the supply curve for cookies will shift to the right.
D) the supply curve for cookies will shift to the left.

Question

Quizplus · Accepted Answer

An increase in the price of flour, which is an input, will increase the cost of producing cookies. Therefore, the supply of cookies will decrease as some producers may choose to produce less or exit the market altogether. This will shift the supply curve for cookies to the left.

Flour Is an Input Used to Produce Cookies