8) Last month, the Big Idea supplie a Corporation supplied 400 units of three-ri

Question

8) Last month, the Big Idea supplie a Corporation supplied 400 units of three-ring binders at $6 per unit. This month, the company supplied the Idea has experienced quant e same quantity of binders at $4 per unit. Based on this evidence, Big A) a decrease in the quantity supplied. B) a decrease in supply. C) an increase in supply. D) an increase in the quantity supplied 9) Which of the following would cause a decrease in the supply of milk? A) A decrease in the price of milk B) An increase the price of a product that producers sell instead of milk C) An increase in the number of firms that produce milk. D) An increase in the price of cookies (assuming that milk and cookies are complements).

Explanation / Answer

8.

A. A decrease in quantity supplied.

A movement occurs when a change in quantity supplied is caused only by a change in price, and vice versa. This is a movement along the supply curve.

9 A) A decrease in the price of milk. Keeping other factors constant, an increase in price results in an increase in quantity supplied. In other words, there is a direct relationship between price and quantity: quantities respond in the same direction as price changes. A decrease in price of a good results in a decrease in quantity supplied.

D) An increase in the price of a complementary good which is cookies.

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