ECONOMICS
PRICE CEILINGS AND FLOORS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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shift to the right
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shift to the left
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no change
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movement along the curve
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Detailed explanation-1: -The supply curve will move upward from left to right, which expresses the law of supply: As the price of a given commodity increases, the quantity supplied increases (all else being equal).
Detailed explanation-2: -The law of supply states that there is a direct relationship between price and quantity supplied. In other words, when the price increases the quantity supplied also increases. This is represented by an upward sloping line from left to right.
Detailed explanation-3: -Prices of relevant inputs-if the cost of resources used to produce a good increases, sellers will be less inclined to supply the same quantity at a given price, and the supply curve will shift to the left.
Detailed explanation-4: -Falling costs If costs fall, more can be produced, and the supply curve will shift to the right. Any change in an underlying determinant of supply, such as a change in the availability of factors, or changes in weather, taxes, and subsidies, will shift the supply curve to the left or right.