Which of the following would result in an increase in supply?
A) A reduction in the premiums firms pay for insurance.
B) A reduction in the quality of technology used by firms.
C) An increase in demand.
D) An increase in consumers' incomes.
E) An increase in the population of consumers.

Question

Quizplus · Accepted Answer

A reduction in the premiums firms pay for insurance would lead to a decrease in their costs of production, making it more profitable for them to produce and increasing the quantity they are willing to supply at each price level.

Answer: E 
 An increase in the population of consumers would lead to a larger market for firms, thereby increasing the potential sales and profits. This would make it more attractive for firms to produce, resulting in an increase in supply.

Which of the Following Would Result in an Increase in Supply