Which of the following is not a factor that might shift the supply curve for Product X?

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Question restatement: Which of the following is not a factor that might shift the supply curve for Product X?

Option a: A decrease in the costs of production of Product X. This is a supply-shifting factor because lower production costs make producing and selling at each price more profitable, so suppliers are willing to supply more at every price, shifting the supply curve to the right.

Option b: New technology is invented that enables quick and low-cost production of Product X. Technology improvements reduce costs or increase efficiency, which typically shifts the supply curve to the right, as firms can produce more at the same price.

Option c: An increase in the price of Product X. Changes in the price of the product itself cause a movement along the existing supply curve (a change in quantity supplied), not a shift of the entire curve. This is because the law of supply states that quantity supplied changes in response to price along the same curve, rather than shifting the supply curve.

Option d: An increase in the number of sellers of Product X. More sellers in the market increase overall market supply at every price, shifting the supply curve to the right.

Additional clarification: The key distinction is between a shift of the supply curve (which occurs when non-price factors alter the quantity producers are willing to supply at every price) and a movement along the curve (which occurs when the price of Product X changes, affecting only the quantity supplied at that price).

Why option c is the not-a-factor-for shifting the curve: Because price changes of Product X itself do not change the entire relationship between price and quantity supplied; instead they cause a single point movement along the current supply curve. In contrast, the other options involve changes in conditions that alter producers' cost structure or market size, thereby shifting the entire curve.

Why the other options are factors that shift the curve:
- Lower production costs (option a) reduce marginal cost and make supplying at each price more attractive, shifting right.
- Technological improvements (option b) typically improve productivity or reduce variable costs, shifting right.
- More sellers (option d) increase total market capacity to supply at each price, shifting right.

In summary, option c stands out as a pure movement along the curve rather than a shift in the curve itself, making it the correct choice for the question as stated.

MUF0061 Economics Unit 1 - Semester 2, 2025 Revision Quiz - Supply (10 - 15 minutes)

Which of the following is not a factor that might shift the supply curve for Product X?

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MUF0061 Economics Unit 1 - Semester 2, 2025 Revision Quiz - Supply (10 - 15 minutes)

Which of the following is not a factor that might shift the supply curve for Product X?

View Explanation

Log in for full answers

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