Figure 5.2. The figure shows the supply and demand curves of a firm.
-Which of the following is true?
A)Sellers are willing to supply more of a good or service at every price after costs have increased.
B)A fall in the price of a product leads to an increase in the profits earned by sellers.
C)A fall in the cost of production leads to a downward movement along the supply curve of a product.
D)Sellers are willing to supply more of a good or service at every price after costs have decreased.
E)An increase in the price of a product leads to a fall in the profits earned by sellers.

Question

​Figure 5.2. The figure shows the supply and demand curves of a firm. 
-​Which of the following is true?
A)​Sellers are willing to supply more of a good or service at every price after costs have increased. 
B)​A fall in the price of a product leads to an increase in the profits earned by sellers. 
C)​A fall in the cost of production leads to a downward movement along the supply curve of a product. 
D)​Sellers are willing to supply more of a good or service at every price after costs have decreased. 
E)​An increase in the price of a product leads to a fall in the profits earned by sellers.

Quizplus · Accepted Answer

According to the law of supply, sellers are willing to supply more of a good or service at every price after costs have decreased. This leads to a rightward shift in the supply curve. However, none of the answer choices mention a rightward shift, which makes D the best choice as it is the closest description to the law of supply.

​Figure 52

Figure 52