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Question & Answer
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The supply curve shifts to the right, indicating an increase in supply.
The supply curve shifts to the left, indicating a decrease in supply.
The supply curve remains unchanged, as production costs do not affect supply.
The supply curve becomes vertical, reflecting a fixed supply regardless of costs.
Understanding the Answer
Let's break down why this is correct
When it costs more to make a product, producers are less willing to sell the same amount. Other options are incorrect because Some think higher costs mean more supply, but actually higher costs make production harder; It is easy to think costs don’t change supply, but costs directly influence how much producers can afford to make.
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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