Question

Which change is illustrated by the shift taking place on this graph?

Supply and Demand Equilibrium Price
A) a decrease in supply
B) an increase in supply
C) an increase in demand
D) a decrease in demand

Answer 1

A shift to the left of the supply curve on the graph indicates a decrease in supply, resulting in a higher equilibrium price and a lower equilibrium quantity.

Step-by-step explanation:

In this graph, a shift to the left of the supply curve would indicate a decrease in supply. This means that less of the product is available in the market, leading to a decrease in the equilibrium quantity and an increase in the equilibrium price. A shift to the left of the supply curve on the graph indicates a decrease in supply, resulting in a higher equilibrium price and a lower equilibrium quantity.

For example, if there is a decrease in the availability of raw materials needed to produce the product, suppliers may be able to produce less of the product, resulting in a decrease in supply.

Therefore, the correct answer is A) a decrease in supply.