A reduction in the costs of production will ?
Correct answer: C. Shift the supply curve
- A. Lead to a movement along the supply curve
- B. Shift the demand curve
- C. Shift the supply curve
- D. Lead to an extension of supply
Explanation
Lower production costs improve the profitability of supplying each quantity, so the entire supply curve shifts rightward. A movement along the curve is caused by a change in the product’s own price, not by costs.
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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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