Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week Antonio's supplier of pepperoni informed him of a 25% increase in price. Which variable determining the position of the supply curve has changed and what effect does it have on supply?

Question

Quizplus · Accepted Answer

The increase in the price of pepperoni, an input for making pizza, directly affects the input prices. As input prices increase, it becomes more costly for Antonio to produce the same amount of pizza, leading to a decrease in supply.

Antonio's Makes the Greatest Pizza and Delivers It Hot to All