ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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price of a complementary good decreases
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large number of producers enter the market
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computer processing improves production
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a new law is passed requiring all new motorcycles to have back-up cameras
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Detailed explanation-1: -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-2: -The supply curve can shift based on several factors including changes in production costs (e.g., raw materials and labor costs), technological progress, the level of competition and number of sellers/producers, and the regulatory & tax environment.
Detailed explanation-3: -Changes in factors like average income and preferences can cause an entire demand curve to shift right or left. This causes a higher or lower quantity to be demanded at a given price.
Detailed explanation-4: -Under conditions of a decrease in demand, with no change in supply, the demand curve shifts towards left. When demand decreases, a condition of excess supply is built at the old equilibrium level. This leads to an increase in competition among the sellers to sell their produce, which obviously decreases the price.