QQuestionEconomics
QuestionEconomics
Which of the following will cause the supply curve to shift to the left?
A fall in input prices
Higher product taxes
Improved technology
12 months agoReport content
Answer
Full Solution Locked
Sign in to view the complete step-by-step solution and unlock all study resources.
Step 1:I'll solve this economics problem step by step, focusing on supply curve shifts.
Step 2:: Understanding Supply Curve Shifts
A supply curve shifts when factors other than the product's price change. These factors are called "non-price determinants of supply".
Step 3:: Analyzing Each Option
Let's examine how each option affects supply:
Step 4:
A fall in input prices - When input prices decrease, production becomes cheaper - This REDUCES production costs - Lower costs INCREASE supply (shift supply curve RIGHT) - Therefore, this does NOT shift the supply curve left
Step 5:
Higher product taxes - Increased taxes raise production costs - Higher costs make production less profitable - Producers will supply LESS at each price point - This SHIFTS the supply curve to the LEFT ✓
Step 6:
Improved technology - Better technology reduces production costs - Lower costs INCREASE supply (shift supply curve RIGHT) - Therefore, this does NOT shift the supply curve left
Step 7:: Conclusion
The only option that shifts the supply curve to the LEFT is "Higher product taxes".
Final Answer
Key Economic Concept: Supply curve shifts occur when production conditions change, independent of the product's price.
Need Help with Homework?
Stuck on a difficult problem? We've got you covered:
- Post your question or upload an image
- Get instant step-by-step solutions
- Learn from our AI and community of students