The following scenarios would cause an increase in the cell phone quantity produced based on the law of supply:
B) Government subsidies provided to cell phone producers increases.
C) The cost of the main component of cell phones decreases substantially.
E) The federal government decreases the tariff on the imported computer
chip inside cell phones.
- If the price of the cell phones will increase then the demand for cell phones will decrease. Hence, option A is incorrect.
- The price of cell phones is placed on sale during holiday seasons will not affect the law of supply because the sale price if less then the demand will increase and considerably the sale. Hence, option C is incorrect.
- If the government subsidies on cell phone increase then the producers will able to produce more cell phones and this will help in increasing the cell phone supply. Hence, option B is correct.
- If the cost of the main component of the cell phone decreases then the producers can purchase more number of main components for the production of cell phones and the supply for cell phone increases. Hence, option C is correct.
- If the federal government decreases the tariff on the chip being imported and used in the cell phones. Then it will decrease the production cost and more number of cell phones are expected to be produced and it will increase the supply of cell phone. Hence, option E is correct.
Hence, options B, C, and E are correct.
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