What is the effect of a rise in production costs on the supply curve?

Multiple choice question for Supply and Demand. Select an option, then review the explanation below.

Show Answers

Cause the demand curve to shift outwardCause the demand curve to shift inwardCause the supply curve to shift outward, increasing quantity supplied at every priceCause the supply curve to shift inward, reducing quantity supplied at every price

Explanation

When production costs increase, suppliers are less willing or able to provide the same quantity at each price level, resulting in a leftward (inward) shift of the supply curve. Demand curves are not directly affected by changes in production costs.

Practice related questions from the same subject.

1.What is the typical shape of a demand curve?
2.What term describes a company earning profits beyond its normal profit level?
3.How does an increase in marginal cost affect output, and how does an increase in marginal revenue impact output?
4.Marginal revenue refers to the ________ resulting from producing an additional ________ of output.
5.What are firms generally assumed to do with their costs and profits?

What is the effect of a rise in production costs on the supply curve?

Explanation

More Supply and Demand MCQs