Sugar is an input used to produce cereal. Suppose that the price of sugar rises. As a result
A)the supply curve for sugar will shift to the right.
B)the supply curve for sugar will shift to the left.
C)the supply curve for cereal will shift to the right.
D)the supply curve for cereal will shift to the left.

Question

Quizplus · Accepted Answer

If the price of sugar rises, it will increase the cost of production for cereal manufacturers. Therefore, firms may reduce the supply of cereal by decreasing their output or increasing their prices, which will shift the supply curve for cereal to the left.

Sugar Is an Input Used to Produce Cereal