A decrease in supply is synonymous with a leftward shift of the supply curve, indicating that producers are willing to supply fewer goods at each price level. It can be caused by various factors such as an increase in production costs, a decrease in technology or a decrease in the number of suppliers.

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A Decrease in Supply

Question 39

Multiple Choice

A decrease in supply

A) is unrelated to changes in the assumptions that underlie the supply curve.
B) produces a supply curve that slopes downward to the right.
C) is caused by a price change along a supply curve.
D) affects only an agricultural supply curve.
E) is synonymous with a leftward shift of the supply curve.

Correct Answer: