Question

in the above figure, an increase in cost of the cheese used to produce pizza

• has no effect.
• shifts the supply curve from s to s₁.
• shifts the supply curve from s to s₂.
• results in a movement from point b to point a.
• results in a movement from point a to point b.

Explanation:

Cheese is an input for pizza production. An increase in input costs reduces producers' willingness/ability to supply pizza at every price, which shifts the supply curve leftward (from S to the curve to its left, labeled as S₁ here). A movement along the supply curve only occurs due to a change in the product's own price, not input costs.

Answer:

shifts the supply curve from S to S₁.