A contraction in supply occurs when ?
Correct answer: C. The quantity supplied falls when the price falls
- A. Demand shifts outwards
- B. The supply curve shifts inwards
- C. The quantity supplied falls when the price falls
- D. The supply curve shifts outwards
Explanation
A contraction of supply is a movement along the supply curve caused by a fall in price, resulting in a lower quantity supplied. An inward shift is instead a decrease in supply.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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