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 Jan 22, 2021

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.

Expert Solution

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.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote