Question

An increase in the price of steel to producers of refrigerators will cause _____________________.

a) the quantity demanded for steel to increase
b) the demand for refrigerators to decrease
c) the quantity supplied of refrigerators to increase
d) the supply curve for refrigerators to shift left

Answer 1

Answer: Option (D) is correct.

Step-by-step explanation:

Price of input is a determinant of supply. Any change in the price of input will shift the supply curve. It was observed that steel is used as a factor of production or as an input in the production of refrigerators. So, if there is any increase in the price of steel will directly increase the cost of production for refrigerator producers. Therefore, this will cause the supply curve for refrigerators to shift leftwards.