Question

When your suppliers increase the prices of your inputs, they increase your _____, and this will shift your supply curve to _____.

Answer 1

The first blank should be filled with production cost, while the second blank should be filled with, downwards.

Supply Curve Dynamics

By convention, price is a function of demand and supply.

However, in case scenarios, when suppliers of inputs increase input prices, the manufacturer's production cost is increased and this in turn shifts the supply curve downwards.

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