question archive If producers require higher prices to produce various quantities, then a) demand will decrease

If producers require higher prices to produce various quantities, then a) demand will decrease

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If producers require higher prices to produce various quantities, then

a) demand will decrease.

b) consumer incomes will decrease.

c) supply has shifted to the left.

d) quantity supplied has increased.

e) supply has increased.

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  • The correct answer is c) supply has shifted to the left.

A shift in the supply can be caused by production costs changes. In this specific scenario, the rising costs of production lead to a leftward shift of the supply curve, which moves the market equilibrium to a new higher market price and lower output (assuming all the other variables are constant). That is to say; the total output will be reduced at any given price due to the increase in supplier price requirement. Therefore, the correct answer is option c). In contrast, option a) denotes a scenario in which the demand decreases. However, an increase in costs does not cause this effect. Some determinants that can cause a shift in the demand curve are income, number of consumers, or consumer tastes. Option b) is not an effect associated with the supply side. Option d) and e) are not results of an increase in prices to produce various quantities.