Learning Path
Question & Answer
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Increase in production costs
Improvement in technology
Increase in consumer demand
Government subsidies to producers
Seasonal changes in consumer preferences
Understanding the Answer
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An increase in production costs makes it more expensive to make goods, so producers supply less, moving the curve inward. Other options are incorrect because A rise in consumer demand changes the demand curve, not supply; Seasonal changes in taste affect how many people want the product, shifting demand, not supply.
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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