ECONOMICS
SUPPLY
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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 the right of the original equilibrium point
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at a spot along the demand curve below and to the left of the original equilibrium point
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Detailed explanation-1: -A rise in the cost of inputs of production will shift the supply curve to the left as the higher input costs correspond to a lower profit maximising quantity.
Detailed explanation-2: -A positive change in supply when demand is constant shifts the supply curve to the right, which results in an intersection that yields lower prices and higher quantity. A negative change in supply, on the other hand, shifts the curve to the left, causing prices to rise and the quantity to decrease.
Detailed explanation-3: -A decrease in the prices of a good’s inputs reduces costs and allows suppliers to supply more of that good at all prices. Therefore, a decrease in the prices of a good’s inputs leads to a rightward shift of the supply curve for that good, as in Figure (b).
Detailed explanation-4: -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).