Question

For the following determinant, "number of sells". Give an example of a scenario that would sift the supply curve to the right

A) An increase in consumer income
B) A decrease in production costs
C) An increase in consumer preferences
D) A decrease in the number of competitors

Answer 1

A decrease in production costs, such as due to technological improvements, will shift the supply curve to the right, indicating an increase in supply.

Step-by-step explanation:

Among the given scenarios, a decrease in production costs can shift the supply curve to the right. This is because a reduction in costs enables producers to supply more goods at every price point. Specifically:

• An improvement in technology that reduces the cost of production will cause an increase in supply, shown as a rightward shift on the supply curve. This improvement means producers can sell at lower prices or supply more at the same price.
• Quantity supplied represents individual points on the supply graph, whereas the supply curve represents all possible quantities that producers are willing to supply at various prices.
• A supply shift to the right signifies that the entire supply curve has moved, indicating an overall increase in the market's capacity to supply goods due to factors such as technological advances.

For example, if a newly invented machine halves the time to produce a watch, the supply of watches would likely increase, shifting the supply curve to the right.