Price falls
Price rises
Demand shots
Technology changes
Answer is Right!
Answer is Wrong!
The correct answer is: D. Technology changes.
A supply curve shows the relationship between the price of a good and the quantity of that good that producers are willing and able to supply. A shift in the supply curve means that producers are willing and able to supply a different quantity of the good at any given price.
There are three main reasons why a supply curve might shift:
- Changes in input prices: If the prices of inputs, such as labor or raw materials, go up, the cost of producing the good will go up. This will cause producers to supply less of the good at any given price, and the supply curve will shift to the left. Conversely, if input prices go down, the cost of production will go down, and producers will supply more of the good at any given price, and the supply curve will shift to the right.
- Changes in technology: If there is an improvement in technology that makes it cheaper to produce the good, the cost of production will go down, and producers will supply more of the good at any given price, and the supply curve will shift to the right. Conversely, if there is a technological change that makes it more expensive to produce the good, the cost of production will go up, and producers will supply less of the good at any given price, and the supply curve will shift to the left.
- Changes in expectations: If producers expect the price of the good to go up in the future, they will be more willing to supply the good today, and the supply curve will shift to the right. Conversely, if producers expect the price of the good to go down in the future, they will be less willing to supply the good today, and the supply curve will shift to the left.
In the case of the question, the supply curve will shift when technology changes. This is because a change in technology can affect the cost of production, which in turn can affect the quantity of the good that producers are willing and able to supply.