Supply and demand question

Question

Sencerio:

When the cost of steel rises, ___the supply will increase and the supply shift will increase?________

I am confused how this is the correct answer because when prices get more expensive, wouldn't it be logical that people would want less of something?

Senecio:

When the buyers reject new models, there is no shift.

I am confused why this is the correct answer because when buyers do not want something production should decrease instead of not shifting.

Answer 1

Well changes to supply and demand can be independent events. Which market is the original question asking about though?

Usually the question would be answered this way:

When the price of steel rises, the quantity supplied will increase

OR

when the price of steel rises, the quantity demanded will decrease.

This prompt says that the cost of steel rises, so that tells me the cost of producing steel has increased and that will cause the supply of a cheaper alterative product to rise. For example, if a firm can produce steel or aluminum and it gets more expensive to produce steel, they will switch some production to aluminum, which increases supply of aluminum.

The specific market that is being discussed is what is important. Can you repost the question with the full text of the prompt?