Graph 14-9
-Refer to Graph 14-9.An increase in market supply from Supply0 to Supply1 is most likely the result of:

Question

Graph 14-9 
-Refer to Graph 14-9.An increase in market supply from Supply0 to Supply1 is most likely the result of:

Quizplus · Accepted Answer

An increase in market supply can be caused by the entrance of new firms in the market, as shown by the shift from Supply0 to Supply1 on the graph. Existing firms changing their cost structure or increasing their level of production beyond Q₁ would result in a movement along the supply curve, rather than a shift of the entire curve. Therefore, option A and B are not the best choices.

Graph 14-9 -Refer to Graph 14-9.An Increase in Market Supply from Supply0