Question

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week Antonio's supplier of pepperoni informed him of a 25% increase in price. Which variable determining the position of the supply curve has changed and what effect does it have on supply?

(A) future expectation; Supply decreases
(B) future expectation; Supply increases
(C) input prices; Supply decreases
(D) input prices; Supply increases

Answer 1

(C) input prices; Supply decreases

Step-by-step explanation:

The input prices are all the cost Anonio inccurs to produce a pizza.

The pepperoni will be part of his input price.

The lowest price at which Antonio can sale a pizza is determinate by his cost.

Now Antonio need to sell their pizzas for more cash. So this increase generated a supply decrease.