Given that energy is an input in production, the development of a cheaper source of energy will result in:
A)a lower price level and a lower amount of production.
B)a higher price level and a higher amount of production.
C)a lower amount of production at every price level.
D)a higher amount of production at every price level.
E)a lower profit at every price level.

Question

Quizplus · Accepted Answer

A cheaper source of energy will lower the cost of production, leading to an increase in the supply of goods and services produced, resulting in higher production levels at every price level. This, in turn, will increase economic growth and generate higher profits for producers. Therefore, the correct option is D - a higher amount of production at every price level.

Given That Energy Is an Input in Production, the Development