vineyards can grow either red wine grapes or white wine grapes on their land. which of the following would…
vineyards can grow either red wine grapes or white wine grapes on their land. which of the following would cause the supply of red wine grapes to decrease?\na. an increase in the price of white wine grapes\nb. an increase in the price of red wine\nc. a decrease in the price of white wine grapes\nd. an increase in the demand for red wine grapes
Answer
Brief Explanations:
When the price of white - wine grapes increases, vineyards have an incentive to shift their production from red - wine grapes to white - wine grapes to take advantage of the higher profits. This leads to a decrease in the supply of red - wine grapes. An increase in the price of red - wine would increase the supply of red - wine grapes. A decrease in the price of white - wine grapes would make red - wine grape production relatively more attractive, increasing its supply. An increase in the demand for red - wine grapes would not directly decrease the supply; rather, it may lead to an increase in the quantity supplied in response to higher prices.
Answer:
A. an increase in the price of white wine grapes