Multiple Choice
Which of the following graphs best illustrates a rightward shift in the supply curve for a good?
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3. The Market Forces of Supply and Demand
Shifts in the Supply Curve
Multiple Choice
An increase in the price of inputs would be represented by a change from:
A
movement along the supply curve upward
B
a rightward shift of the supply curve to a leftward shift
C
movement along the supply curve downward
D
a leftward shift of the supply curve to a rightward shift
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 happens when the price of the good itself changes, while a shift of the supply curve occurs when other factors, such as input prices, change.
Recognize that an increase in the price of inputs makes production more expensive, which typically reduces the quantity supplied at every price level.
Since the quantity supplied decreases at every price, the entire supply curve shifts to the left, indicating a decrease in supply.
A leftward shift of the supply curve means that for any given price, producers are willing to supply less than before due to higher input costs.
Therefore, the correct representation of an increase in input prices is a shift of the supply curve from right to left (a leftward shift), not a movement along the curve.
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