Multiple Choice
What happens in the market for beef jerky if new companies start launching new beef jerky product lines?
1
views
3. Supply and Demand
Shifting Supply
Multiple Choice
What happens in the market for blenders if the price of glass, a key component in making blenders, rises?
A
Demand shifts to the left
B
Demand shifts to the right
C
Supply shifts to the left
D
Supply shifts to the right
Verified step by step guidance1
Step 1: Identify the key components of the problem. Here, the price of glass, which is an input (or resource) used to produce blenders, increases.
Step 2: Understand how an increase in the price of an input affects the supply curve. When the cost of production rises, it becomes more expensive for producers to make the same quantity of goods.
Step 3: Recall that an increase in production costs causes the supply curve to shift. Specifically, the supply curve shifts to the left, indicating a decrease in supply at every price level.
Step 4: Differentiate between demand and supply shifts. Since the change is in the cost of production, it affects supply, not demand. Demand shifts are caused by factors like consumer preferences or income changes.
Step 5: Conclude that the correct effect of a rise in the price of glass is a leftward shift of the supply curve for blenders, meaning producers supply fewer blenders at each price.
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