The price of cotton increases, and it is having an impact as the primary input for blue jeans. How does this situation affect the price and supply of blue jeans?

This choice suggests a decrease in price and an increase in supply, which is contradictory to the economic principle of rising input costs. When the cost of cotton rises, it usually does not lead to a lower price for the final product, nor does it incentivize producers to increase supply, as higher costs can limit their ability to produce more.

While it may seem plausible that both price and supply could rise, the increase in input costs typically discourages supply expansion. Instead, manufacturers often pass on the increased costs to consumers, resulting in higher prices while potentially reducing supply, rather than both rising simultaneously.

This option implies that both the price and supply would decrease, which is unlikely given that higher input costs generally lead to increased prices for the final goods. The supply may decrease due to the higher production costs, but the price is expected to rise, not fall.