Assertion (A): A rise in the price of an input shifts the supply curve to the left.
Reason (R): A dearer input raises the marginal cost of producing each unit.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Both are true.
A firm's supply curve is its MC curve; higher MC at every output (R) means less offered at every price (A).

Concept: Input prices and supply
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsDeterminants of supply; movement and shift

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Ten questions from Perfect Competition & Supply, at your own pace.

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Ten questions from Perfect Competition & Supply, at your own pace.

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Assertion (A): A rise in the price of an input shifts the supply curve to the left.Reason (R): A dearer input raises the marginal cost of producing each unit.

Explanation

Assertion (A): A rise in the price of an input shifts the supply curve to the left.
Reason (R): A dearer input raises the marginal cost of producing each unit.