HomeTestsSearchRankProfile
mediumMCQGeneral Awareness2026Economics
1 mark

An increase in the price of tomatoes will cause _________.

  1. A
    an increase in the supply of tomatoes
  2. B
    a decrease in the supply of tomatoes
  3. C
    an increase in the supply of tomato ketchup
  4. D
    a decrease in the supply of tomato ketchup

Solution & Step-by-step Explanation

Tomatoes are a primary input/raw material for manufacturing tomato ketchup. According to the laws of supply, an increase in the price of an input (tomatoes) increases the cost of production for the final good (tomato ketchup). This rise in production costs causes a reduction in profits, thereby leading to a decrease in the supply of tomato ketchup.Note: An increase in the price of tomatoes causes an increase in the "quantity supplied" of tomatoes, not a change/shift in the "supply" curve of tomatoes itself.

Practice this question

Try it yourself before checking the explanation above.

An increase in the price of tomatoes will cause _________.
A
an increase in the supply of tomatoes
B
a decrease in the supply of tomatoes
C
an increase in the supply of tomato ketchup
D
a decrease in the supply of tomato ketchup

Share This Question

Related Questions

Ready for a Full Test?

Practice with timed mock tests and track your performance across Economics.

Discussion