Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. This would cause
A) the short-run aggregate supply curve to shift to the right.
B) the short-run aggregate supply curve to become flatter.
C) the short-run aggregate supply curve to shift to the left.
D) the short-run aggregate supply curve to become nearly vertical at all levels of output.

Question

Quizplus · Accepted Answer

A decrease in the supply of coal would increase its price, which would increase production costs for manufacturing firms that use coal as a source of energy. This would cause a decrease in the short-run aggregate supply, leading to a leftward shift of the curve.

Coal Is Used as a Source of Energy in Many