-Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S₁ to S₂ could have been caused by

Question

Quizplus · Accepted Answer

A rightward shift in supply means that at every given price, producers are willing and able to supply more of the good. The granting of a subsidy to the producer would lower their costs of production, therefore making them willing and able to supply more at every given price, leading to a rightward shift in supply curve from S₁ to S₂. None of the other choices provided would cause a rightward shift in supply.