How Will a Reduction in the Price of Cotton Influence

question 58

Multiple Choice

How will a reduction in the price of cotton influence the market for blue jeans?

• A) The cost of producing blue jeans will fall, and the supply curve for blue jeans will shift to the left.
• B) The cost of producing blue jeans will fall, and the supply curve for blue jeans will shift to the right.
• C) The cost of producing blue jeans will rise, and the supply curve for blue jeans will shift to the left.
• D) The cost of producing blue jeans will rise, and the supply curve for blue jeans will shift to the right.

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Definitions:

Equilibrium Value

The price and quantity at which the supply of an item equals the demand for that item, achieving a balance in the market.

Marginal Product

The additional output that is produced as a result of utilizing one more unit of a variable input, holding other inputs constant.

Equilibrium Quantity

The level of goods or services offered and demanded at the price of equilibrium.

Labor

The effort involving both mental and physical capacities of humans utilized in creating goods and services.