[amp_mcq option1=”decrease” option2=”remain unchanged” option3=”increase” option4=”None of these” correct=”option1″]<\/p>\n
The correct answer is A. decrease.<\/p>\n
The supply function is a curve that shows the relationship between the price of a good and the quantity of that good that firms are willing and able to supply. In a perfectly competitive market, firms are price-takers, meaning that they have no control over the price of their product. As a result, the only way for firms to increase their profits is to increase the quantity of output they produce.<\/p>\n
The marginal cost (MC) of production is the additional cost incurred by a firm when it produces one more unit of output. When MC decreases, firms are able to produce more output at a lower cost. This means that firms are willing to supply more output at any given price, and the supply curve shifts to the right.<\/p>\n
When MC increases, firms are faced with a higher cost of production. This means that they are only willing to supply more output at a higher price, and the supply curve shifts to the left.<\/p>\n
Option B is incorrect because if MC remains unchanged, the supply curve will not shift.<\/p>\n
Option C is incorrect because if MC increases, the supply curve will shift to the left.<\/p>\n
Option D is incorrect because one of the factors that can cause the supply curve to shift is a change in the MC of production.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”decrease” option2=”remain unchanged” option3=”increase” option4=”None of these” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-44417","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n