Correct Response: A. If the supply curve for platinum shifts to the left, the price for a given quantity of platinum has increased. The cost to produce a catalytic converter will therefore increase and the company will most likely respond by increasing the price of a converter. Reducing the amount of platinum in each converter would require significant design changes, and perhaps significant technological innovation, since the current design probably uses the least amount of platinum possible due to its high cost (B). An increase in production of converters is unlikely, since the price to make a converter will have increased and demand is more likely to decrease than increase (C). Offering new customers discounts on purchases will boost demand and, if converters cost more to make, decrease profits (D).
