Which of the following is a determinant of supply (i.e., a factor that shifts the supply curve) for a good?

• A. Consumer tastes and preferences
• B. The price of the good itself
• C. The price of an input used to produce the good (e.g., wages or raw materials)
• D. Consumer income

Answer: (C)

Verified step by step guidance

1. Understand that a determinant of supply is a factor that causes the entire supply curve to shift either to the right (increase in supply) or to the left (decrease in supply), rather than just causing movement along the supply curve.
2. Recall that the price of the good itself does not shift the supply curve; instead, it causes movement along the supply curve (change in quantity supplied).
3. Identify factors that affect production costs or the ability to produce the good, such as the price of inputs (e.g., wages, raw materials), technology, number of sellers, and expectations about future prices.
4. Recognize that consumer tastes and preferences and consumer income are determinants of demand, not supply, so they shift the demand curve instead.
5. Conclude that the price of an input used to produce the good is a determinant of supply because changes in input prices affect production costs and thus shift the supply curve.