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All of these factors would shift the supply curve of tobacco, except a
All of these factors would shift the supply curve of tobacco, except
a. A tax on the production of tobacco
b. Changes in the wages of agricultural workers
c. Change in the price of tobacco
d. Bad weather
Expert Solution
- The correct answer is C.) Change in the price of tobacco
-A shift in the supply curve: It demonstrated when a different quantity of a product is supplied at every price. It is referred to as a change in supply. Occurs when factors that we keep constant in defining supply curve changes rather than the price. A change in price leads to a movement along the supply curve and not a shift.
- A tax on the production of tobacco: When a tax is imposed on tobacco it increases the cost of supplying tobacco leading to the supply curve shifting to the left.
-Wages of agricultural workers is input in the production of tobacco; a decline in wages will shift the supply curve to the right while an increase in wages shifts the supply curve to the left.
- Bad weather: It will affect the output leading to a poor harvest; it is represented by a leftward shift in the supply curve.
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