Multiple Choice
Refer to Figure 26-1. Which of the following events would shift the supply curve from S1 to S2?
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3. The Market Forces of Supply and Demand
Shifts in the Supply Curve
Multiple Choice
Which of the following events would cause a shift in the supply curve for a good?
A
A decrease in the quantity supplied due to a lower market price
B
An increase in the price of inputs used to produce the good
C
A change in consumer preferences for the good
D
A decrease in the price of the good itself
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 changes, affecting the quantity supplied, but the supply curve itself does not move.
Identify that a decrease in the quantity supplied due to a lower market price represents a movement along the supply curve, not a shift, because the price of the good itself is changing.
Recognize that a change in consumer preferences affects demand, not supply, so it does not cause the supply curve to shift.
Focus on factors that affect supply other than the good's own price, such as input prices, technology, number of sellers, or expectations. An increase in the price of inputs used to produce the good raises production costs, which causes the supply curve to shift to the left (a decrease in supply).
Conclude that only changes in factors like input prices cause the supply curve to shift, while changes in the good's own price cause movements along the supply curve.
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