ECONOMICS
SUPPLY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The good becomes dependent on government regulation
|
|
|
the good becomes cheaper to produce
|
|
|
The good becomes more expensive to produce
|
|
|
It has no effect on the cost of the good
|
Detailed explanation-1: -If the price of a resource used to produce the product increases, this will increase the costs of production and the producer will no longer be willing to offer the same quantity at the same price. They will want a higher price to cover the higher costs. This shifts the supply curve to the left ( S).
Detailed explanation-2: -Resource prices-a rise in resource prices will cause a decrease in supply or leftward shift in supply curve; a decrease in resource prices will cause an increase in supply or rightward shift in the supply curve.
Detailed explanation-3: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.
Detailed explanation-4: -In a free market, it can be expected that the price will increase to the equilibrium price, as the scarcity of the good forces the price to go up. When a product is scarce, consumers are faced with conducting their own cost-benefit analysis; a product in high demand but low supply will likely be expensive.