Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A decrease in the cost of battery production
B
An increase in government taxes on electric vehicles
C
A rise in consumer preference for gasoline cars
D
An increase in the price of electric cars
Understanding the Answer
Let's break down why this is correct
Answer
A supply curve for electric cars shifts to the right when producers can supply more cars at every price, usually because the cost of making them falls. This can happen if a new battery technology reduces manufacturing costs, if economies of scale are achieved by building larger factories, or if government subsidies lower the overall price of inputs. When such changes lower the marginal cost of each car, firms are willing to sell more at every price point, so the supply curve moves outward. For example, if a new factory produces batteries 30 % cheaper, car makers can increase output at the same prices, shifting the supply curve rightward. This shift means that for any given price, a larger quantity of electric cars becomes available in the market.
Detailed Explanation
When battery production becomes cheaper, makers can build more cars for the same price. Other options are incorrect because Higher taxes raise the cost of making cars, so producers supply less; More people want gasoline cars, which changes the demand for electric cars, not how many are made.
Key Concepts
Supply curve shifts
Production costs
Market equilibrium
Topic
Shifts in Supply Curve
Difficulty
medium level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
1
Question 1If the demand for a product is elastic and the supply curve shifts to the left due to increased production costs, what is the likely outcome for the equilibrium price and quantity?
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2
Question 2Which of the following scenarios would most likely cause a rightward shift in the supply curve for smartphones?
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3
Question 3Which of the following factors can cause a shift in the supply curve for a product? Select all that apply.
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4
Question 4If the supply curve for electric cars shifts to the right, what is the most likely underlying cause for this change?
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5
Question 5Which of the following factors would likely cause a rightward shift in the supply curve for smartphones?
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