Suppose that government decides to create a license for widget makers.Only licensed widget makers are allowed to produce widgets.Moreover,only half of the current widget producers are eligible to obtain the license.What will happen with the supply curve of widgets?
A) It will not change.
B) It will shift to the left.
C) It will shift to the right.
D) It will slope downwards.

Question

Quizplus · Accepted Answer

By limiting the number of eligible suppliers, the supply of widgets will decrease as half of the current widget producers are no longer allowed to produce widgets. Therefore, the supply curve of widgets will shift to the left.

Suppose That Government Decides to Create a License for Widget