An increase in the costs of production will ?
Correct answer: D. Shift supply inwards
- A. Shift demand outwards
- B. Shift demand inwards
- C. Shift supply outwards so more is supplied at each and every price, all other things unchanged
- D. Shift supply inwards
Explanation
Higher production costs reduce the amount firms are willing to supply at each price, shifting the supply curve inward or leftward. Demand is not directly shifted by this cost change.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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