Final answer:
A decrease in wood prices makes door production less costly, leading to increased production by door producers and a rightward shift in the supply curve for doors.
Step-by-step explanation:
If the price of wood falls, producing doors becomes less costly and door producers will increase their production, and the supply curve of doors will shift to the right. This is because a decrease in the cost of production allows firms to supply a larger quantity at any given price.
Similar to technological advancements, a fall in production costs enhances firms' profitability, which in turn can attract more firms into the market. However, as more firms enter the market and supply increases, profits are likely to decrease until reaching a point where economic profits are zero due to increased competition. On the other hand, when costs of production increase, for instance with rising wages, some firms may face economic losses and exit the market.
This leads to a leftward shift of the supply curve, which increases market prices until remaining firms just break even. The overall result is a lower quantity supplied in the market when production costs increase.