ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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supply curve shifts to the right (increases)
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the supply curve shifts to the left (decreases)
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Either A or B
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None of the above
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Detailed explanation-1: -Factors that can shift the supply curve for goods and services, causing a different quantity to be supplied at any given price, include input prices, natural conditions, changes in technology, and government taxes, regulations, or subsidies.
Detailed explanation-2: -Increased government regulation can cause the aggregate supply curve to shift to the left.
Detailed explanation-3: -As the price of milk rises, quantity demanded falls because: (1) People consume less milk. (2) Some people drop out of the market for milk and drink tea or orange juice instead.
Detailed explanation-4: -The equilibrium price rises, and the equilibrium quantity falls. This technological advance increases milk production. As a result, supply increases, shifting down and to the right. Although the equilibrium quantity rises, the equilibrium price falls, explaining why farmers are not happy.