Answer:
The answer is: It will move resources from belt production to shoe production, thereby decreasing the supply of belts.
Explanation:
The Law of Supply states that as the price of a product increases, suppliers are willing to offer a larger quantity of that product. But if the price of a product decreases, suppliers will be willing to offer smaller quantities of that product.
In this case, the leather company will want to offer a larger quantity of shoes since the price of shoes is likely to increase. Since all companies only have a certain total amount of resources, in order to be able to produce more shoes they might have to decrease the quantity supplied of belts.
