What would cause the supply curve to shift from S2 to S1 as shown in - ProProfs Discuss
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What would cause the supply curve to shift from S2 to S1 as shown in the diagram below?





A. A decrease in the opportunity costs of producing the good
B. A decrease in the costs of production
C. An increase in the prices of inputs used in production
D. An expected decrease in the future price of the good

This question is part of EC 201 Exam 2 P
Asked by Sultan.h.g, Last updated: May 26, 2020

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2 Answers

F. Ray

F. Ray, Student, Kansas City

Answered Mar 26, 2019

The factor that would cause the supply curve to shift from S2 to S1 as shown in the diagram would be an increase of price. What happens is that - given that supply of goods is not constant but shifts from time to time - the price of parts in production increases the cost of production and reduces the profit margin.

As a result, supply falls. It leads to a leftward shift in the supply curve. Similarly, when prices increase the shift is to the right. The factors that affect the supply curve are: input prices, number of sellers, technology, and customer changes in requirements.

 

John Smith

John Smith

Answered May 13, 2017

An increase in the prices of inputs used in production
 

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