An increase in supply is caused by:
A)an increase in input prices.
B)suppliers' expectations of higher prices in the future.
C)an increase in the price of the good.
D)a decrease in the price of resources used in production.

Question

Quizplus · Accepted Answer

An increase in supply is caused by a decrease in the price of resources used in production, which makes it cheaper for suppliers to produce a larger quantity of the good. Increased input prices (A) would lead to a decrease in supply, while suppliers' expectations of higher prices (B) and an increase in the price of the good (C) would lead to an increase in demand rather than an increase in supply.

An Increase in Supply Is Caused By