An increase in the price of inputs used to produce good A will:
A)increase supply, increase price and increase the quantity exchanged.
B)increase demand, increase price and increase the quantity exchanged.
C)decrease supply, increase price and decrease the quantity exchanged.
D)decrease supply, decrease price and decrease the quantity exchanged.

Question

An increase in the price of inputs used to produce good A will:
A)​increase supply, increase price and increase the quantity exchanged.
B)​increase demand, increase price and increase the quantity exchanged.
C)​decrease supply, increase price and decrease the quantity exchanged.
D)​decrease supply, decrease price and decrease the quantity exchanged.

Quizplus · Accepted Answer

An increase in the price of inputs used to produce good A will increase the cost of production, which will lead to a decrease in supply. As the supply decreases, the price of good A will increase, and as the price increases, the quantity exchanged will decrease, resulting in a decrease in the quantity exchanged. Therefore, Option C is the best choice.

An Increase in the Price of Inputs Used to Produce