Impact of Rising Kayak Prices and Oil Prices on Supply

What is the likely outcome of the increase in kayak prices and rising oil prices?

A. decrease in the supply of kayaks and canoes

Impact of Rising Kayak Prices and Oil Prices on Supply

The increase in the price of kayaks in the marketplace indicates higher production costs for kayak manufacturers. Additionally, the rising price of oil, a key input in the production of plastic canoes, further contributes to increased costs for the manufacturer. These factors are likely to have an impact on the supply of both kayaks and canoes.

As the cost of production increases, manufacturers may find it less profitable to produce kayaks and canoes. This can lead to a decrease in the supply of both products. Higher production costs make it more challenging for manufacturers to offer these recreational watercraft at competitive prices, potentially resulting in a reduced quantity of kayaks and canoes available in the marketplace.

While the quantity supplied of canoes and kayaks may be affected differently due to variations in production costs and market demand, the most probable outcome is a decrease in the supply of both products. The increase in prices and production costs puts pressure on the manufacturer's ability to supply the market with an ample quantity of kayaks and canoes.