In a standard supply-and-demand model, a decrease in supply means:

• A. Demand decreases, causing the equilibrium price and quantity to fall without any shift in supply.
• B. The supply curve does not shift; instead, quantity supplied decreases only because the market price falls (a movement along the curve).
• C. The supply curve shifts leftward (or upward), so at each price a smaller quantity is supplied.
• D. The supply curve shifts rightward (or downward), so at each price a larger quantity is supplied.

Answer: (C)

Verified step by step guidance

1. Step 1: 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 changes, causing quantity supplied to change, but the supply relationship itself remains the same.
2. Step 2: Recognize that a decrease in supply means that at every price level, producers are willing to supply less than before. This is represented by a shift of the supply curve, not just a movement along it.
3. Step 3: Identify the direction of the supply curve shift when supply decreases. A decrease in supply shifts the supply curve to the left (or upward), indicating a lower quantity supplied at each price.
4. Step 4: Contrast this with a decrease in demand, which shifts the demand curve leftward, causing both equilibrium price and quantity to fall, but this is different from a supply decrease.
5. Step 5: Conclude that the correct description of a decrease in supply is that the supply curve shifts leftward (or upward), so at each price a smaller quantity is supplied.