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Homework answers / question archive / If we observed a fall in the price of Upper T-shirts and an increase in the quantity of Upper T-shirts that producers sell, the most likely explanation would be that A

If we observed a fall in the price of Upper T-shirts and an increase in the quantity of Upper T-shirts that producers sell, the most likely explanation would be that A

Economics

If we observed a fall in the price of Upper T-shirts and an increase in the quantity of Upper T-shirts that producers sell, the most likely explanation would be that

A. the law of supply applies to Upper T-shirts, but some other influence on selling plans has also changed and the supply of Upper T-shirts has increased.

B. it is unprofitable to produce Upper T-shirts.

C. firms should produce fewer Upper T-shirts.

D. the supply curve has shifted leftward.

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The correct answer is A. the law of supply applies to Upper T-shirts, but some other influence on selling plans has also changed and the supply of Upper T-shirts has increased.

  • While the quantity supplied is a function the law of supply, the selling price increase can be due to either a decrease in the quantity supplied or an increase in the quantity demanded.