Which of the following best describes what happens when a nonprice determinant of supply changes?

• A. The equilibrium price remains unchanged.
• B. The supply curve shifts to the left or right.
• C. The demand curve shifts to the left or right.
• D. There is a movement along the supply curve.

Answer: (B)

Verified step by step guidance

1. Understand that a nonprice determinant of supply refers to factors other than the price of the good that affect the quantity supplied, such as technology, input prices, or government policies.
2. Recall that when a nonprice determinant changes, it affects the entire supply relationship, causing the supply curve itself to shift rather than causing movement along the curve.
3. Recognize that a shift to the right of the supply curve indicates an increase in supply, meaning producers are willing to supply more at every price, while a shift to the left indicates a decrease in supply.
4. Note that a movement along the supply curve happens only when the price of the good changes, not when nonprice determinants change.
5. Conclude that the correct description of what happens when a nonprice determinant of supply changes is that the supply curve shifts to the left or right.