Exhibit 3-3 Supply curves

-In Exhibit 3-3,a shift in the supply curve from S₁ to S₂ can be because of:

Question

Exhibit 3-3 Supply curves
 
-In Exhibit 3-3,a shift in the supply curve from S₁ to S₂ can be because of:

Quizplus · Accepted Answer

A shift in the supply curve from S₁ to S₂ is caused by technological innovation, which lowers the cost of production and increases the quantity of goods supplied at each price level. Subsidies to consumers would affect the demand curve, not the supply curve, while higher taxes imposed on producers would decrease supply, shifting the curve to the left (S₃). Changes in consumer preferences would also affect the demand curve, not the supply curve.

Exhibit 3-3 Supply Curves