Supply

Expectations

• Shifts the supply curve

• Increases demand

• Decreases supply

• Stabilizes prices

Graph showing a leftward shift in the supply curve

• This represents an increase in supply due to lower input costs.

• This represents a decrease in supply, often due to higher input costs or adverse events.

• This indicates a stable supply with no changes in costs.

• This shows a shift in demand rather than supply.

Movement along the supply curve

• Occurs when there is a change in the quantity supplied due to a change in price.

• Happens when there is a shift in the entire supply curve due to external factors.

• Is defined as a decrease in the quantity supplied regardless of price changes.

• Refers to the increase in demand leading to higher prices.

How does a technological improvement affect the supply curve?

• It shifts the supply curve to the left, indicating a decrease in supply.

• It shifts the supply curve to the right, indicating an increase in supply.

• It has no effect on the supply curve.

• It makes the supply curve vertical, indicating fixed supply.

Factors causing shifts in the supply curve

• Changes in input prices, technology, number of sellers, and expectations about the future.

• Changes in consumer preferences, government regulations, and seasonal variations.

• Changes in interest rates, inflation, and currency exchange rates.

• Changes in marketing strategies, advertising, and brand loyalty.

A fall in input prices makes production more profitable at each output price.

• Lower input prices increase profit margins for producers.

• Higher input prices decrease profit margins for producers.

• Input prices have no effect on production profitability.

• Increased output prices lead to lower production costs.

Graph showing changes in input prices with supply curves shifting right.

• The graph illustrates how a decrease in input prices, like sugar, affects supply.

• The graph shows an increase in demand due to higher input prices.

• The graph indicates that supply decreases when input prices rise.

• The graph represents a stable supply curve regardless of input prices.

What happens to the supply curve if the number of sellers increases?

• The supply curve shifts to the left, indicating a decrease in supply.

• The supply curve remains unchanged, indicating no change in supply.

• The supply curve shifts to the right, indicating an increase in supply.

• The supply curve becomes vertical, indicating a fixed supply.

What does a rightward shift in the supply curve indicate?

• An increase in quantity supplied at each price.

• A decrease in quantity supplied at each price.

• An increase in demand at each price.

• A decrease in demand at each price.

How does a natural disaster affect the supply curve?

• It shifts the supply curve to the right, representing an increase in supply.

• It shifts the supply curve to the left, representing a decrease in supply.

• It has no effect on the supply curve.

• It causes the supply curve to become vertical.