ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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At a spot along the demand curve above and to the right of the original equilibrium point
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At a spot along the demand curve above and to the left of the original equilibrium point
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At a spot along the demand curve below and to thw right of the original point
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Not this one
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Detailed explanation-1: -Supply curve shift: Changes in production cost and related factors can cause an entire supply curve to shift right or left. This causes a higher or lower quantity to be supplied at a given price. The ceteris paribus assumption: Supply curves relate prices and quantities supplied assuming no other factors change.
Detailed explanation-2: -Changes in the prices of inputs: The prices of the raw materials or inputs used to produce a good also cause the supply curve to shift. An increase in the prices of a good’s inputs will raise costs to suppliers and cause suppliers to supply less of that good at all prices.
Detailed explanation-3: -Increase in the price of an input shifts the marginal cost curve upward. Accordingly, the supply curve shifts upward or to the left implying less supply at the same price (i.e., same supply at a higher price).
Detailed explanation-4: -An increase in factor prices should decrease the quantity suppliers will offer at any price, shifting the supply curve to the left. A reduction in factor prices increases the quantity suppliers will offer at any price, shifting the supply curve to the right.
Detailed explanation-5: –If price of an input increases, the cost of producing the product will increase, and the product will be less profitable at every price. The supply of the product will DECLINE and supply curve will shift to the LEFT.