An increase in the price of milk, an input in the production of cheese, will _________ the supply of cheese. 1 pointIncreaseNot changeWe can’t sayDecrease

Break Down the Problem

1. Identify the relationship between the price of inputs and the supply of produced goods.
2. Analyze how an increase in the price of milk would impact the production costs for cheese.

Relevant Concepts

3. According to the law of supply, an increase in production costs (due to higher input prices) typically results in a decrease in supply.
4. In this case, milk is an essential input for cheese production.

Analysis and Detail

5. When the price of an essential input like milk increases, cheese producers may find it less profitable to produce cheese at previous levels. As production becomes costlier, some producers may reduce their output, leading to a decrease in the overall supply of cheese in the market.

Verify and Summarize

6. Thus, the correct answer is confirmed: the supply of cheese will decrease due to the increase in the input cost of milk.

Final Answer

The increase in the price of milk will decrease the supply of cheese.