Consider the supply of avocados. Explain why a change in the price of fertilizer
ID: 1110872 • Letter: C
Question
Consider the supply of avocados. Explain why a change in the price of fertilizer causes a shift in the supply curve for avocados rather than a movement along the supply curve for avocados A change in the price of fertilizer causes a shift in the supply curve for avocados because O A. the price of fertilizer also shifts avocado demand. O B. the price of avocados is held constant along a supply curve O C. factors representing the cost of production do not affect avocado prices. O D. a change in the cost of inputs changes how much a producer will supply at any given price E. the price of fertilizer changes for a given supply of avocados.Explanation / Answer
Since fertilizer is an input for the production of avocados, so if the price of the fertilizers increases, it is costly to produce avocados. Therefore producer reduces the supply of avocados and vice-versa. Therefore there will rightward or leftward of supply curve of avocados and not the movement along the supply curve.
There will be movement along the supply curve if the price of avocados itself changes.
Therefore it can be said that a change in the price of the fertilizers causes a shift in the supply curve because a change in the cost of inputs changes how much a producer will supply at any given price.
Hence option D is the correct answer.