Question

A business produces apple juice and orange juice. The price of orange juice has increased from $2.00 to $2.50. This can be modeled by _____.

a. a downward movement along the supply curve for apple juice

b. an upward movement along the supply curve for apple juice

c. a shift of the supply curve for apple juice to the left

d. a shift of the supply curve for apple juice to the right

Answer 1

The increase in the price of orange juice may cause producers to shift some of their resources toward producing more orange juice instead of apple juice, as they aim to maximize their profits on the now more expensive product. This adjustment typically leads to a decrease in the supply of apple juice.

Therefore, the correct answer is:

**c. a shift of the supply curve for apple juice to the left**.