If Input Prices Fall, the Cost of Production Will Also

question 68

True/False

If input prices fall, the cost of production will also fall, causing the supply curve to shift to the right.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where supply equals demand.

Excess Demand

A scenario in which the demand for a product or service surpasses the supply available at the existing price.

Surplus

An excess of production or supply over demand.

Excess Supply

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, leading to downward pressure on the price.