Final answer:
When the price of each item is $2, producers will supply 8 items.
Step-by-step explanation:
To determine how much producers will supply when the price is $2 each and consumers purchase 12 items, we can use the supply equation. In this case, the supply equation is: Quantity supplied = 16 - 4 * Price. Plugging in the price of $2, we get Quantity supplied = 16 - 4 * 2 = 16 - 8 = 8 items. So producers will supply 8 items when the price is $2 each.
This is an example of a supply and demand scenario in economics where the quantity supplied by producers is influenced by the price. When the price is low, producers may be less willing to supply a larger quantity.
Key terms: supply, quantity supplied, price, supply equation, consumers, producers, economics.