A South African cold drink manufacturer experiences an increase in production costs due to higher electricity tariffs and transport costs. Quantity of cold drinks supplied per week before and after the increase in production costs, by price: R7: 140 before, 130 after; R6: 120 before, 110 after; R5: 100 before, 90 after; R4: 80 before, 70 after; R3: 60 before, 50 after; R2: 40 before, 30 after; R1: 20 before, 10 after. At a price of R5 per cold drink, what is the effect of the increase in production costs on supply?

Question

Answer

Quantity supplied decreases from 100 to 90 units per week, indicating a decrease in supply.

Answer

Supply increases because producers supply more at every price.

Answer

Demand decreases from 100 to 90 units per week.

Answer

Quantity supplied increases from 90 to 100 units per week.

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A South African cold drink manufacturer experiences an increase in production co...

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