Which of the following events would shift the supply curve of smartphones to the right?

• A. An increase in consumer income
• B. A rise in the price of smartphones
• C. A decrease in the cost of microchips used in smartphone production
• D. A new tax imposed on smartphone manufacturers

Answer: (C)

Verified step by step guidance

1. Understand that the supply curve represents the relationship between the price of a good and the quantity that producers are willing to supply, holding other factors constant.
2. Recall that a shift to the right in the supply curve means an increase in supply, which occurs when producers are willing to supply more at every price.
3. Identify factors that affect supply other than the price of the good itself, such as input costs, technology, taxes, and subsidies.
4. Analyze each event: an increase in consumer income affects demand, not supply; a rise in the price of smartphones causes movement along the supply curve, not a shift; a decrease in the cost of microchips (an input) lowers production costs, increasing supply and shifting the supply curve to the right; a new tax on manufacturers increases costs, decreasing supply and shifting the supply curve to the left.
5. Conclude that only a decrease in the cost of microchips shifts the supply curve of smartphones to the right.