Question

65. Refer to the above diagram. A decrease in supply is depicted by a:

A. move from point x to point y.
B. shift from S1 to S2.
C. shift from S2 to S1.
D. move from point y to point x.

Answer 1

A decrease in supply is depicted by a shift from S1 to S2. Quantity supplied is represented by individual points on the supply graph, while supply refers to the entire supply curve. Factors such as cost can cause the supply curve to shift.

Step-by-step explanation:

A decrease in supply is depicted by a shift from S1 to S2.

Quantity supplied is represented by each individual point on the supply graph, whereas supply constitutes the entire supply curve. A supply shift moves the entire supply curve to the right or left. For example, if the cost of leather increases, the supply for watches would shift to the left, indicating a decrease in supply.

Keywords: decrease in supply, shift in supply, quantity supplied, supply curve, supply determinants