Which of the following is a supply factor that can change supply and demand projections?

• A. A decrease in consumer income
• B. An increase in the price of a substitute good
• C. A technological improvement in production methods
• D. A change in consumer preferences

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the difference between supply factors and demand factors. Supply factors affect the quantity of a good or service that producers are willing and able to sell at various prices, while demand factors affect consumers' willingness and ability to buy.
2. Step 2: Analyze each option to determine whether it influences supply or demand. For example, a decrease in consumer income typically affects demand because it changes consumers' purchasing power.
3. Step 3: Recognize that an increase in the price of a substitute good affects demand, as consumers may switch their preferences between related goods.
4. Step 4: Identify that a technological improvement in production methods is a supply factor because it can reduce production costs or increase productivity, thereby shifting the supply curve.
5. Step 5: Note that a change in consumer preferences affects demand, as it alters consumers' tastes and willingness to buy certain goods.