Question

Either more sellers in the market or lower production costs can cause supply to _____ at each price level.

Answer 1

The correct answer is: "increase".

When more companies enter in a market and offer the same product, the total amount supplied increases (at all price levels). On the other hand, if production costs decrease, producers are willing to manufacture a larger output, as they can charge a lower price per item in the market an attract more buyers, or charge the same as before but earn a higher margin (revenue-cost) per unit sold.

In both cases, the supply curve shifts right and, at all price levels, the amount offered is larger. (as in the graph attached)

Answer 2

The correct answer for the question that is being presented above is this one: "increase." Either more sellers in the market or lower production costs can cause supply to increase at each price level.