For any competitive market, the supply curve is closely related to the
A)preferences of consumers who purchase products in that market.
B)income tax rates of consumers in that market.
C)firms' costs of production in that market.
D)interest rates on government bonds.

Question

Quizplus · Accepted Answer

The supply curve is mostly determined by the firms' costs of production in any competitive market. As the cost of production increases, the supply decreases, and as it decreases, the supply increases. Therefore, the relationship between supply and production costs is direct. Preferences of consumers, income tax rates, and interest rates on government bonds have minimal or no impact on the supply curve.

For Any Competitive Market, the Supply Curve Is Closely Related