Final answer:
The supply curve shifts to the right when the cost of production decreases, indicating an increased quantity of goods supplied at every price level. Option b is the correct answer.
Step-by-step explanation:
When the cost of production decreases, businesses are able to produce more goods for the same cost, which leads to an increase in the quantity supplied at every price level. This scenario results in the supply curve shifting to the right (choice b).
To put it simply, when production becomes less costly, a company can provide more products at the same price, thus expanding the available supply. This rightward shift indicates that there is a greater quantity of the good or service available for sale at every price, and it is a fundamental concept in economics when understanding market dynamics.
If we consider the opposite scenario as a reference, where the cost of production increases, a firm would then supply a smaller quantity at any given price, leading to a leftward shift of the supply curve. By this logic, when costs decrease, the effect is reversed, encouraging an increase in production and yielding the opposite effect on the supply curve.