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Question & Answer
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The supply curve shifts inward due to increased production costs.
The supply curve shifts outward as they are motivated to sell more bread.
The supply curve remains unchanged because the price of bread is stable.
The supply curve shifts outward due to new government subsidies.
Understanding the Answer
Let's break down why this is correct
When flour costs more, the bakery spends more to make bread. Other options are incorrect because Misconception: thinking higher costs push a bakery to sell more; Misconception: supply stays the same if bread price is stable.
Key Concepts
Shifts in Supply Curve
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Deep Dive: Shifts in Supply Curve
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Definition
Shifts in the supply curve occur when factors other than price influence the quantity of a product supplied at each price level. Changes in production costs, technology, government policies, and expectations can shift the supply curve either outward (increase in supply) or inward (decrease in supply).
Topic Definition
Shifts in the supply curve occur when factors other than price influence the quantity of a product supplied at each price level. Changes in production costs, technology, government policies, and expectations can shift the supply curve either outward (increase in supply) or inward (decrease in supply).
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