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All of these factors would shift the supply curve of tobacco, except a

Economics Dec 12, 2020

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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