Learning Path
Question & Answer
Choose the Best Answer
A decrease in the price of raw materials used to manufacture smartphones
A new tax imposed on smartphone manufacturers
A rise in consumer income leading to increased demand for smartphones
A technological advancement that reduces production costs for smartphones
Understanding the Answer
Let's break down why this is correct
When the price of the materials that make phones falls, each factory can make phones for less money. Other options are incorrect because Adding a tax raises the cost for makers, so they would supply less, not more; Higher income makes people want more phones, but that changes demand, not how many phones firms are ready to sell.
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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