Multiple Choice
Which of the following would cause a rightward shift of the supply curve for cell-phone services?
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3. The Market Forces of Supply and Demand
Shifts in the Supply Curve
Multiple Choice
Refer to the accompanying graph. Which of the following events would cause the supply curve to shift to the right?
A
An increase in the price of the good
B
A decrease in the cost of production inputs
C
The imposition of a new tax on producers
D
A decrease in the number of sellers in the market
Verified step by step guidance1
Understand that a supply curve shift to the right means an increase in supply at every price level, which is different from a movement along the supply curve caused by a price change.
Recall that an increase in the price of the good itself causes a movement along the supply curve, not a shift, so this does not shift the supply curve to the right.
Recognize that a decrease in the cost of production inputs lowers production costs, making it cheaper for producers to supply more at every price, which shifts the supply curve to the right.
Note that the imposition of a new tax on producers increases production costs, which shifts the supply curve to the left, not to the right.
Understand that a decrease in the number of sellers reduces market supply, shifting the supply curve to the left, so it does not cause a rightward shift.
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