Question

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of a. crystal to be unaffected. b. lead to increase. c. crystal to decrease. d. crystal to increase.

Answer 1

Answer: Option (b) is the correct answer.

Explanation:

Since, the input factor of production is lead and its price has come down. So, with decrease in price there will also occur a decrease in cost of production of the crystal.

And, when cost of production is low then it is possible to create more number of lead crystals due to which there will also occur an increase in supply of the crystal.

Therefore, we can conclude that lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of lead increases.