Question 5
Theory of SupplyA shift in supply curve indicates that a different quantity will be supplied at each possible price because
- A.consumers are willing to pay higher prices
- B.supply is facing competition
- C.other factors than price have changed
- D.price has changed
Show the answer and explanation
Answer: C (other factors than price have changed)
Explanation
A change in the good's own price only moves along the curve; the whole curve shifts when other factors (costs, technology, weather, etc.) change.