Graph 14-8

-Refer to Graph 14-8. An increase in market supply from Supply₀ to Supply₁ is most likely the result of:

Question

Graph 14-8 -Refer to Graph 14-8. An increase in market supply from Supply₀ to Supply₁ is most likely the result of:

Quizplus · Accepted Answer

An increase in market supply from Supply₀ to Supply₁ is most likely the result of the entrance of new firms in the market. This is because the entire supply curve shifts outward, indicating a larger quantity supplied at each price level. Existing firms changing their cost structure or increasing their level of production beyond Q₁ would not result in a shift in the entire supply curve.

Graph 14-8 -Refer to Graph 14-8. an Increase in Market Supply from in Market