Question

Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase? a decrease in the price of cattle an increase in the demand for cattle an increase in the price of sheep feed an increase in the price of sheep

Answer 1

Answer:

The correct answer is: a decrease in the price of cattle.

Explanation:

Ranchers can raise either cattle or sheep on their land. They will choose the option which is most profitable. A decrease in the price of cattle will make it less profitable. So ranchers will prefer to raise more sheep.

This will cause the supply of sheep to increase. As a result, the supply curve will move to the right.

An increase in the demand for cattle will increase its price. Consequently, its supply will increase and that of sheep will decrease. An increase in the price of sheep feed will make it costly to raise sheep, so its supply will decrease.  

An increase in the price of sheep will cause its quantity supplied to increase. The supply curve will remain the same.