As the price of flour (an input into the cookie production process) increases, firms that produce cookies will:
A)increase the supply of cookies.
B)increase the quantity of cookies supplied.
C)decrease the supply of cookies.
D)decrease the quantity of cookies supplied.

Question

Quizplus · Accepted Answer

As the price of an input (flour) increases, the cost of production increases for cookie firms. This means that cookie firms will then reduce their supply of cookies. Therefore, the correct choice is (C), decrease the supply of cookies.

As the Price of Flour (An Input into the Cookie