The graph shown depicts the market for a good. Assume the market was originally in equilibrium where the demand curve (D) and supply curve (S1) intersect. Something changes in the market, and the supply curve shifts to S2. What could have caused this shift?
A) The price of pizza sauce increased.
B) The price of pizza decreased.
C) The price of labor for pizza shops decreased.
D) None of these would cause the supply curve to shift to S2.

Question

The graph shown depicts the market for a good. Assume the market was originally in equilibrium where the demand curve (D) and supply curve (S1) intersect. Something changes in the market, and the supply curve shifts to S2. What could have caused this shift?
A) The price of pizza sauce increased. 
B) The price of pizza decreased. 
C) The price of labor for pizza shops decreased. 
D) None of these would cause the supply curve to shift to S2.

Quizplus · Accepted Answer

A decrease in the price of labor for pizza shops would lower the cost of production for producers, leading to an increase in the quantity supplied at any given price. This would result in a shift of the supply curve from S1 to S2. None of the other options listed would directly cause such a shift.

The Graph Shown Depicts the Market for a Good