Which action would shift the supply curve to the right?

Which action would shift the supply curve to the right?

• A. A fall in input prices.
• B. A rise in input prices.
• C. An increase in technology that reduces production costs would shift supply.
• D. A decrease in taxes on consumers.

Answer: (A)

A fall in input prices lowers production costs, so firms can produce and supply more at every price. This makes the entire supply curve shift to the right, meaning more is supplied at each price level. Remember, a shift in supply comes from non-price factors. Lower input costs directly reduce how much it costs to produce goods, which encourages more production. By the same logic, an improvement in technology that reduces production costs would also shift the supply curve right. Conversely, a rise in input prices would raise costs and shift supply left, and a decrease in taxes on consumers affects demand, not supply.

A fall in input prices lowers production costs, so firms can produce and supply more at every price. This makes the entire supply curve shift to the right, meaning more is supplied at each price level.

Remember, a shift in supply comes from non-price factors. Lower input costs directly reduce how much it costs to produce goods, which encourages more production. By the same logic, an improvement in technology that reduces production costs would also shift the supply curve right. Conversely, a rise in input prices would raise costs and shift supply left, and a decrease in taxes on consumers affects demand, not supply.