In the following question you are asked to determine, other things equal, the ef

Question

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.

An increase in the prices of resources used to produce X will

Multiple Choice

increase S, increase P, and increase Q.

increase D, increase P, and increase Q.

decrease S, decrease P, and decrease Q.

decrease S, increase P, and decrease Q.

Explanation / Answer

An increase in the cost of production would shift the supply curve to the left implies lower quantity and higher price with demand curve remain as it is; decrease in S, decrease in Q and increase in P

hence the correct option is d

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