Question : Because ______, the firm's supply curve has an upward slope.
Option 1: The costs of producing additional units of output will exceed a certain threshold.
Option 2:
Consumers believe that there is a positive relationship between price and quality.
Option 3: As production expands, inferior inputs are used.
Option 4: None of the above
Correct Answer: The costs of producing additional units of output will exceed a certain threshold.
Solution :
The supply curve of a firm has an upward slope because the production costs of additional units of output will rise beyond a certain point.
The supply curve slopes upward because suppliers can choose how much of their goods to produce and later sell.
Hence option a is the correct answer.
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