Rise in input costs shifts supply leftward

Steps:

• Vanilla price increase raises production costs for ice cream.
• Higher costs reduce quantity supplied at each price, shifting supply curve left.
• Leftward supply shift intersects demand at higher price and lower quantity.
• Point C represents this new equilibrium from the supply shift.

Why C is correct:

• C shows new equilibrium with higher price and lower quantity, per law of supply (cost increase reduces supply).

Why the others are wrong:

• A: Indicates rightward supply shift, which would lower price—inconsistent with cost rise.
• B: Suggests demand increase, raising both price and quantity—ignores supply effect.
• D: Depicts no change or demand decrease, failing to capture supply contraction.

Final answer: C