Oil is used to produce rubber boots. When the price of oil falls,

Question

Quizplus · Accepted Answer

When the price of oil falls, the cost of producing rubber boots decreases. As a result, the supply curve of rubber boots shifts rightward, as firms are willing to supply more at each given price. The demand for rubber boots is not directly affected by the price of oil, so the demand curve remains the same. Therefore, only choice C correctly identifies the shift in the supply curve of rubber boots.

Oil Is Used to Produce Rubber Boots