If the cost of production of hula hoops increases, the supply curve will:

• A. shift to the left
• B. shift to the right
• C. become vertical
• D. remain unchanged

Answer: (A)

Verified step by step guidance

1. Understand that the supply curve represents the relationship between the price of a good and the quantity supplied by producers.
2. Recall that an increase in the cost of production makes it more expensive for producers to supply the same quantity at each price level.
3. Recognize that when production costs increase, producers are willing to supply less at every price, causing the supply curve to shift.
4. Identify that a shift to the left of the supply curve indicates a decrease in supply, meaning less quantity supplied at each price.
5. Conclude that an increase in production costs causes the supply curve to shift to the left.