An increase in quantity supplied can be caused by a(n)
A) decrease in quantity demanded
B) rise in resource input prices
C) increase in price
D) decrease in the number of firms in the market
E) tax levied on the producer

Question

Quizplus · Accepted Answer

An increase in price generally leads to an increase in quantity supplied, as producers are willing to supply more of a good at higher prices. A rise in resource input prices would typically lead to a decrease in quantity supplied, as it would lead to higher production costs. A decrease in quantity demanded would not cause an increase in quantity supplied, as firms would be less likely to produce more if there is less demand for their product. A decrease in the number of firms in the market would typically lead to a decrease in quantity supplied, as there would be fewer producers to supply the market. A tax levied on the producer would typically lead to a decrease in quantity supplied, as it would raise production costs and make it less profitable for firms to produce the good.

An Increase in Quantity Supplied Can Be Caused by A(n)