Question

Classify each scenario according to whether the change in quantity is caused by a shift of the supply curve or movement along it. Shift of the supply curve Movement along the supply curve

Answer 1

1. Shift in supply curve 2. Shift in supply curve. 4. Shift in supply curve

3. Movement along the supply curve 5. Movement along the supply curve.

1. The improvement in technology reduces the cost and increase the profit of the sellers. The discovery of flash steaming tuna reduces the cost of production of sellers. The supply curve shift to the right and equilibrium quantity increase.

2. The movement of workers to Toronto cause less availability of labour and increase the cost of production. The supply curve shift to the left and the equilibrium quantity decrease.

3. At a higher price, the quantity supplied of gold and silver increase. There is a movement up along the supply curve.

4. The supply of a product increase with the increase in the number of firms. The supply curve shift to the right.

5. At a lower price less quantity of soap will be supplied. There will be a movement down along the supply curve.