Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The supply curve shifts to the right
B
The supply curve shifts to the left
C
The supply curve remains unchanged
D
The supply curve becomes vertical
Understanding the Answer
Let's break down why this is correct
Answer
When the costs of inputs, like materials or labor, increase, it becomes more expensive for producers to make their products. This usually leads to a decrease in supply because companies may not be able to afford to produce as much as they did before. As a result, the supply curve shifts to the left, meaning that at the same price, less of the product will be available in the market. For example, if a bakery faces higher prices for flour and sugar, it might bake fewer cakes, leading to fewer cakes being offered for sale. Thus, higher input costs can make it harder for businesses to supply products, affecting overall availability.
Detailed Explanation
When input costs go up, it costs more to make the product. Other options are incorrect because Some might think higher costs mean more supply, but that's not true; It's a common mistake to think supply stays the same.
Key Concepts
supply curve
Topic
Impact of Input Costs on Supply
Difficulty
easy level question
Cognitive Level
understand
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