Question

The market price of airline flights increased recently. Some economists suggest that the price increased because jet fuel is much more expensive than before. If the economists are correct, it must be the case that:

Answer 1

Answer:

The supply of airline flights decreased.

Explanation:

The market price of airline flights has increased. The increase in the price of jet fuel is said to be the reason behind this. An increase in the price of fuel will increase the cost of production for flights.

This increase in cost will cause the supply to decrease. As a result, the supply curve will move to the left.

This leftward shift in the supply curve will consequently cause the price to increase.