ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The supply curve shifts to the left.
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The supply curve shifts to the right.
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The price of the good increases.
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The supply of the good decreases.
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Detailed explanation-1: -Which of the following describes the relative elasticity in demand for the product shown in a period of economic change? Demand is inelastic because it is a low-cost necessity. Which of the following is generally true after a shift in supply or demand? Equilibrium is gradually restored.
Detailed explanation-2: -The answer is “B. An expectation of a shortage in the future.” If consumers believe that the product will be unavailable in the future, they will purchase more of it at every price today.
Detailed explanation-3: -An increase in price almost always leads to an increase in the quantity supplied of that good or service, while a decrease in price will decrease the quantity supplied.
Detailed explanation-4: -The demand for a normal good increases if income increases. The demand for an inferior good decreases if income increases. Expected future income and expected future prices influence demand today. For example, if the price of a computer is expected to fall next month, the demand for computers today decreases.