Figure 5.2. The figure shows the supply and demand curves of a firm. -Refer to figure 5.2. Which of the following will cause a shift in the supply curve from S to S₁? A)A decline in the cost of producing the commodity B)An increase in the cost of producing the commodity C)An increase in the price of the commodity D)A decline in the price of the commodity E)A leftward shift in the demand curve of the product

Question

Quizplus · Accepted Answer

A decline in the cost of producing the commodity would decrease the marginal cost of producing the product and shift the supply curve from S to SS1U1B0. This is because the firm can produce the same quantity of output at a lower cost, making it profitable to produce at a lower price point.

​Figure 52

Figure 52