Figure 3-11
In Figure 3-11, suppose D ₁ and S ₁ indicate initial conditions in the market for kitchen cabinets. Which of the following would tend to cause the supply curve to shift from S ₁ to S ₂?

Question

Figure 3-11

In Figure 3-11, suppose D ₁ and S ₁ indicate initial conditions in the market for kitchen cabinets. Which of the following would tend to cause the supply curve to shift from S ₁ to S ₂?

Quizplus · Accepted Answer

A decrease in the price of wood, a resource used to produce kitchen cabinets, would tend to lower the cost of production and increase the profitability of producing and selling kitchen cabinets. As a result, the supply curve would shift to the right, from S ₁ to S ₂. The invention of "folding" plates and cups might decrease the demand for kitchen cabinets, but would not directly affect the supply curve. A decrease in consumer income or an increase in the price of steel hinges would tend to decrease supply, causing a leftward shift of the supply curve.

Figure 3-11 In Figure 3-11, Suppose D 1 and S 1 Indicate

Figure 3-11 In Figure 3-11, Suppose D ₁ and S ₁ Indicate