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WAEC Economics 2025 Question 30

Question 30

Theory of Supply

An increase in the price of a factor of production in an industry may cause

  1. A.more firms to enter the market.
  2. B.supply of goods to decrease.
  3. C.the quantity supplied of the factor input to decrease.
  4. D.the government to increase taxes.
Show the answer and explanation

Answer: B (supply of goods to decrease.)

Explanation

Higher input costs reduce the supply of the final goods.