Pacific Gas and Electric burns coal to generate electricity. If the price of coal decreases, we expect a shift to the _____ of the _____ curve for _____ and a _____ price for electricity.

Question

Quizplus · Accepted Answer

If the price of coal decreases, the cost of producing electricity decreases for Pacific Gas and Electric, which will result in a shift to the right of their supply curve for electricity. This means that they will be willing and able to supply more electricity at each price. As a result of the increased supply, the market price for electricity will decrease.

Pacific Gas and Electric Burns Coal to Generate Electricity