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WAEC Economics 2016 Question 14

Question 14

Theory of Supply

How does producers' expectation of a price fall affect the supply curve of a product? There will be

  1. A.a movement along the curve.
  2. B.a leftward shift.
  3. C.no shift of the supply curve.
  4. D.a shift to the right.
Show the answer and explanation

Answer: D (a shift to the right.)

Explanation

Expecting lower prices later, producers sell more now, so present supply increases (shifts right).