Question

You are a producer of cold medicine. Last month, a fire at your factory eliminated 50% of your firm’s production capability. At the same time, your compensation costs increased by 5% because of an increase in healthcare costs. What is the consequence of these events?

Answer 1

-The flood shifts the supply to the left.

-The flood does not shift the demand curve.

-The increase in healthcare costs shifts the supply curve to the left.

-The increase in healthcare costs doesn't shift the demand curve.

Step-by-step explanation:

The decrease in supply will shift supply to the left and increase in supply cost will shift supply left, and demand will not change