Exhibit 4-10

-Refer to the exhibit.Which of the following will be caused by an increase in the number of firms producing baby formula?

Question

Exhibit 4-10
 
-Refer to the exhibit.Which of the following will be caused by an increase in the number of firms producing baby formula?

Quizplus · Accepted Answer

An increase in the number of firms producing baby formula will lead to an increase in the overall supply of baby formula in the market. This means that the supply curve will shift to the right from S₁ to S₂. Therefore, option B is the correct choice. A movement along the supply curve (options A and C) would occur due to a change in the quantity supplied in response to a change in price, but not due to a change in the number of firms. Option D is incorrect because an increase in the number of firms will lead to a shift to S₂, not S₁.

Exhibit 4-10 -Refer to the Exhibit.Which of the Following Will Be Caused