In the standard model, we expect the partial derivative of quantity supplied with respect to input price to be:
A) positive.
B) negative.
C) either positive or negative.
D) Cannot make a clear determination with the given information.

Question

Quizplus · Accepted Answer

In the standard model of economics, if the price of inputs increases, the cost of production increases, which typically leads to a decrease in the quantity supplied. This is because producers may reduce production due to higher costs, leading to a negative relationship between input price and quantity supplied.

In the Standard Model, We Expect the Partial Derivative of Quantity