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Multiple Choice
Which of the following will shift a market supply curve to the right (increase supply) for a good?
A
A decrease in consumer income for a normal good
B
An increase in the price of the good itself
C
An increase in the price of a complement in consumption
D
An improvement in production technology that lowers firms' costs
Verified step by step guidance
1
Understand that a supply curve shows the relationship between the price of a good and the quantity supplied by producers, holding other factors constant.
Recognize that a rightward shift in the supply curve means an increase in supply at every price level, which typically occurs when production becomes more efficient or cheaper.
Analyze each option: a decrease in consumer income affects demand, not supply; an increase in the price of the good itself causes movement along the supply curve, not a shift; an increase in the price of a complement in consumption affects demand, not supply.
Identify that an improvement in production technology reduces production costs, enabling firms to supply more at every price, thus shifting the supply curve to the right.
Conclude that only factors that change production costs or conditions (like technology improvements) shift the supply curve, while changes in prices of the good or consumer income affect quantity supplied or demand.