Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Supply decreases
B
Supply increases
C
Supply remains the same
D
Supply becomes unstable
Understanding the Answer
Let's break down why this is correct
Answer
When production costs decrease, it becomes cheaper for companies to make their products. This encourages them to produce more because they can earn a higher profit even at lower prices. As a result, the supply of the product increases in the market. For example, if a factory finds a way to make shoes using less expensive materials, it can produce more shoes. This increase in supply can lead to lower prices for consumers, making the product more affordable.
Detailed Explanation
When it costs less to make something, companies can produce more of it. Other options are incorrect because Some might think lower costs mean less supply; It's a common mistake to think costs don't affect supply.
Key Concepts
Supply
Topic
Understanding Demand and Supply
Difficulty
easy level question
Cognitive Level
understand
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