Which of the following factors would not increase supply?

Study for the Indiana RECP Comprehensive Test. Utilize flashcards and multiple-choice questions, each with hints and explanations. Prepare to ace your exam!

An increase in construction costs typically would not increase supply, as it makes the process of building more expensive for developers. When construction costs rise, developers may decide to build fewer properties because higher costs can reduce profit margins or make projects financially unfeasible. This can lead to a decrease in the overall supply of new housing or commercial properties available in the market.

In contrast, population growth tends to increase demand, which can encourage more supply. Governmental controls, depending on their nature, can either restrict or encourage supply; for instance, zoning regulations or building permits might limit construction, but subsidies or tax incentives can promote it. An increase in the labor force generally supports the growth of supply, as it can enhance productivity and efficiency in construction and various industries. Thus, only rising construction costs directly impact the ability and willingness of suppliers to provide goods or services, leading to a potential reduction in supply.

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