Multiple Choice
Refer to the accompanying graph. Which of the following events would cause the supply curve to shift to the right?
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3. The Market Forces of Supply and Demand
Shifts in the Supply Curve
Multiple Choice
Which of the following would cause a shift in the supply curve?
A
A change in the price of the good itself
B
A movement along the supply curve
C
A change in consumer income
D
A change in the cost of production inputs
Verified step by step guidance1
Understand the difference between a movement along the supply curve and a shift of the supply curve. A movement along the supply curve occurs when the price of the good itself changes, causing quantity supplied to change, but the supply curve itself does not shift.
Recognize that a shift in the supply curve means the entire supply relationship changes, so at every price, the quantity supplied is different. This happens due to factors other than the good's own price.
Identify factors that cause the supply curve to shift, such as changes in production costs, technology, number of sellers, expectations, or government policies.
Analyze the options given: a change in the price of the good causes movement along the curve, not a shift; a change in consumer income affects demand, not supply; a change in the cost of production inputs affects the cost structure of producers, causing the supply curve to shift.
Conclude that the correct cause of a supply curve shift among the options is a change in the cost of production inputs, because it changes the willingness or ability of producers to supply the good at every price.
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