Which of the following would most likely cause the market supply curve for a good to shift to the right (increase in supply), holding everything else constant?

• A. A change in the quantity supplied due to a movement along the supply curve after the price rises
• B. An increase in consumer income, raising demand for the good
• C. A decrease in the cost of key inputs used to produce the good
• D. A decrease in the price of the good itself

Answer: (C)

Verified step by step guidance

1. Understand the difference between a movement along the supply curve and a shift of the supply curve. A movement along the supply curve occurs when the price of the good changes, affecting the quantity supplied, but the supply curve itself does not shift.
2. Recognize that changes in consumer income affect demand, not supply. An increase in consumer income typically shifts the demand curve, not the supply curve.
3. Identify that a decrease in the cost of key inputs used to produce the good reduces production costs, making it cheaper for producers to supply the good at every price level. This causes the supply curve to shift to the right (an increase in supply).
4. Note that a decrease in the price of the good itself causes a movement along the supply curve (a decrease in quantity supplied), not a shift of the supply curve.
5. Conclude that the factor most likely to cause a rightward shift in the supply curve, holding everything else constant, is a decrease in the cost of key inputs used to produce the good.