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QUESTION 37 Your pizza restaurant uses the finest food ingredients to make authentic brick-oven pizzas, and...

QUESTION 37

  1. Your pizza restaurant uses the finest food ingredients to make authentic brick-oven pizzas, and your mozarella cheese is imported from Italy. However, the new tariffs imposed by the US on food products from the European Union have raised the cost of the imported cheese. What impact does this have on your market for brick-oven pizzas?  

    A.

    Demand curve shifts right

    B.

    Supply curve shifts left

    C.

    Supply curve shifts right

    D.

    Demand curve shifts left

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Answer #1

Option B. Supply curve shifts left

Explanation: Because of the increase in the production costs, the restaurant would like to supply a lower quantity at each price point. So, the supply curve would shift towards the left.

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