The aggregate supply curve is shifted to the right (outward) by a decrease in the price of any input to the production process.

Question

Quizplus · Accepted Answer

When the price of an input to the production process decreases, the cost of production also decreases. This results in an increase in the quantity of goods and services supplied at every price level, shifting the aggregate supply curve to the right (outward).

The Aggregate Supply Curve Is Shifted to the Right (Outward)