Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in supply due to higher production capacity
B
Decrease in supply because of rising costs
C
No change in supply levels
D
Increase in demand leading to supply decrease
Understanding the Answer
Let's break down why this is correct
Answer
One common effect of economic recovery on supply shifts in a market is that the overall supply usually increases. When the economy is recovering, businesses often feel more confident and may invest in new equipment, hire more workers, or expand their operations. This increase in production means that more goods are available for consumers, which can lead to a rightward shift in the supply curve. For example, if a car manufacturer sees an increase in demand as people start buying more cars after a recession, they might ramp up production, making more cars available in the market. As a result, this increased supply can help lower prices and make products more accessible to consumers.
Detailed Explanation
When the economy recovers, businesses can produce more goods. Other options are incorrect because Some might think that rising costs always mean less supply; It's a common mistake to think nothing changes during recovery.
Key Concepts
Economic Recovery
Topic
Economic Recovery and Supply Shifts
Difficulty
easy level question
Cognitive Level
understand
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