Use the following to answer question(s): Simultaneous Shifts in Demand and Supply

-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market, the change in supply may have resulted from:

Question

Use the following to answer question(s): Simultaneous Shifts in Demand and Supply
 
-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market, the change in supply may have resulted from:

Quizplus · Accepted Answer

The shift in supply to the right from S₁ to S₂ suggests an increase in the quantity of the good supplied at each price point. This is typically seen with improvements in technology that allow for more efficient and cost-effective production. Wage increases and a decrease in the number of sellers would typically result in a leftward shift of the supply curve, as the cost of production increases and fewer firms are willing to produce at each price point. Therefore, option B is the best choice as it provides a plausible explanation for the shift in the supply curve.

Use the Following to Answer Question(s): Simultaneous Shifts in Demand