Correct Option: A. It decreases the supply of the product. Detailed Explanation: To understand why an increase in the price of a substitute good decreases the supply of a product, we need to clarify a few key concepts in economics, particularly regarding supply, demand, and substitutes.

1. Understanding Substitute Goods:
2. Substitute goods are products that can be used in place of each other. For example, if the price of coffee rises, consumers might buy more tea instead, as tea serves as a substitute for coffee.
3. Impact of Price Increase on Substitutes:
4. When the price of a substitute good increases, it becomes more attractive for consumers. This means that consumers will likely shift their consumption from the original product to the substitute. For instance, if the price of tea rises, consumers may buy more coffee instead.
5. Supply Dynamics:
6. In a competitive market, suppliers respond to changes in demand and prices. If the price of a substitute good increases, suppliers of that substitute may find it more profitable to produce more of that good. Consequently, they may divert resources (like labor and raw materials) away from the original product to focus on the more profitable substitute.
7. Supply Curve Shift:
8. The supply curve represents the relationship between the price of a good and the quantity supplied. If suppliers are reallocating resources to produce more of the substitute good, the quantity supplied of the original product will decrease. This is represented graphically as a leftward shift of the supply curve for the original product.
9. Conclusion:
10. Therefore, when the price of a substitute good increases, it leads to a decrease in the supply of the original product because suppliers are incentivized to produce more of the substitute instead.

Why Other Options Are Incorrect:

• Option B: It increases the supply of the product.
• This option is incorrect because an increase in the price of a substitute does not incentivize suppliers to produce more of the original product. Instead, it encourages them to produce less of it as they focus on the more profitable substitute.
• Option C: It has no effect on the supply of the product.
• This option is also incorrect. An increase in the price of a substitute good does have a significant effect on the supply of the original product, as explained above. The market dynamics change, leading to a reallocation of resources.
• Option D: It causes the supply curve to shift to the left.
• While this option is partially correct in that it describes the direction of the shift, it is not as precise as option A. The leftward shift indicates a decrease in supply, but option A directly states the effect on supply, making it the more accurate choice.

Summary for Revision:

• Substitute goods can replace each other in consumption.
• An increase in the price of a substitute good makes it more attractive, leading consumers to switch from the original product.
• Suppliers will respond by reallocating resources to produce more of the substitute, decreasing the supply of the original product.
• The correct answer is that an increase in the price of a substitute good decreases the supply of the original product.