Question

4) According to Law of supply, if the cost of production increases because of higher price of raw

materials, the supply

a) Decreases

b) Increases

c) Remains same

d) Any of the above​

Answer 1

Answer:

If production costs increase, the supplier will face increasing costs for each quantity level. Holding all else the same, the supply curve would shift inward (to the left), reflecting the increased cost of production. The supplier will supply less at each quantity level.

Answer 2

Answer:

the principle that the higher the price, the larger the quantity produced