Question

Suppose your production costs increased. In one or two sentences, describe the effect of this increase on the quantity of goods you supply.

Answer 1

Well since there is an increase in the amount of money you have to spend to produce the product. So it means that the production rate of said good would decrease in quantity.

Answer 2

The increase in costs can result from internal factors such as low productivity or an increase in labor costs. It can also be reflected in external factors such as increased costs of raw materials, components, transportation or compliance with regulations. When it is reflected in the supply chain for an existing product, it forces a manufacturer to raise prices and lose the advantage of competitiveness or reduce the profit margin to maintain price levels.

There are certain factors that influence production. For example, energy costs and unexpected fluctuations in commodity prices are unforeseen obstacles that destabilize supply chains and make it difficult for manufacturers to have positive financial results.