Figure: Supply Shift In the figure, the supply curve shifted from S₀ to S₁. To describe this movement, we would say that:

Question

Quizplus · Accepted Answer

The supply curve has shifted to the left (from S₀ to S₁), indicating a decrease in supply. This means that at any given price level, producers are willing to supply less of the good. Therefore, there would be a decrease in the quantity demanded, as represented by a movement along the demand curve. No information is given about changes in demand, so option A and C can be ruled out. Option D is incorrect because supply and quantity demanded move in the same direction when there is a shift in supply.

Figure: Supply Shift in the Figure, the Supply Curve