Exhibit 4-2 Supply and demand curves

-In Exhibit 4-2,which of the following might cause a shift from S₁ to S₂?

Question

Exhibit 4-2 Supply and demand curves
 
-In Exhibit 4-2,which of the following might cause a shift from S₁ to S₂?

Quizplus · Accepted Answer

A decrease in the number of producers would cause a shift from S₁ to S₂, as there would be fewer suppliers in the market. This would lead to a decrease in the quantity supplied at any given price, resulting in a leftward shift of the supply curve. An increase in the number of producers would shift the supply curve to the right (from S₁ to S₃, for example), as there would be more producers competing to supply goods at each price level. Improvements in technology would also shift the supply curve to the right, as producers are able to produce more efficiently and at lower cost. An increase in consumer income would not directly affect the supply curve, as it relates to changes in demand rather than supply.

Exhibit 4-2 Supply and Demand Curves