Question

Which of the following is correct regarding supply?

A. An increase in technology will lead to a decrease in supply causing the supply curve
to shift left.
B. A decrease in the number of sellers in the market will lead to an increase in supply
leading to a shift of the supply curve to the right.
C. A change in price will lead to a change in quantity supplied and a movement along
the existing supply curve.
D. An increase in price will lead to a decrease in supply causing a shift of the supply
curve to the left.
E. A decrease in price of a good will lead to an increase in supply causing a shift of the
supply curve to the right.

Answer 1

The correct statement is C, where a change in price causes a change in quantity supplied and results in a movement along the supply curve; factors like technology improvements increase supply, shifting the curve right.

Step-by-step explanation:

The correct statement regarding supply is C: A change in price will lead to a change in quantity supplied and a movement along the existing supply curve. Unlike demand, changes in supply do not occur due to price changes but due to other factors such as technology, number of sellers, and cost of production.

For instance, an improvement in technology that reduces the cost of production will cause an increase in supply, shown as a shift of the supply curve to the right. Conversely, a decrease in the number of sellers in the market will typically lead to a decrease in supply, causing the supply curve to shift to the left.