Asked by Animel Amber on May 10, 2024
Verified
Which factor would cause an INCREASE in the supply of a good?
A) input prices rising
B) a fall in the price of the good
C) an increase in the number of sellers
D) expectations of future price increases
Input Prices Rising
A condition where the costs of the raw materials and components needed for production increase.
Fall in the Price
A decrease in the market price of a good or service over a specific period of time.
Number of Sellers
The total count of individual or entities offering a particular good or service in a market.
- Determine the elements influencing the rise or fall in the availability of a product.
- Understand the importance of the quantity of producers in determining the supply of goods.
Verified Answer
RJ
recha joshiMay 10, 2024
Final Answer :
C
Explanation :
An increase in the number of sellers leads to an increase in the supply of the good because there are more producers now producing the good, which increases the quantity supplied. A rise in input prices (choice A) decreases the profits of producers and discourages them from producing more, leading to a decrease in supply. A fall in the price of the good (choice B) increases the quantity demanded by consumers, but producers might not respond by increasing the supply if the profits are low. Expectations of future price increases (choice D) might lead producers to hold onto their inventory, leading to a decrease in the supply of the good.
Learning Objectives
- Determine the elements influencing the rise or fall in the availability of a product.
- Understand the importance of the quantity of producers in determining the supply of goods.
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