Figure 4-6Refer to Figure 4-6. The shift from S' to S could be caused by

Question

Figure 4-6Refer to Figure 4-6. The shift from S' to S could be caused by

BlackTom AI · Accepted Answer

To start, let's identify what the graph is showing: S and S' are both upward-sloping supply curves plotted with price on the vertical axis and quantity on the horizontal axis. A shift from S' to S represents a rightward shift in supply, meaning at every price level, a larger quantity is supplied.
Option 1: an increase in the number of sellers. This change increases market supply because more producers are offering the good, which raises the total quantity supplied at each price. This rightward shift aligns with moving from S' to S.
Option 2: an increase in input prices. When input costs rise, producing the good becomes more expensive, so suppliers produce less at each price, causing the supply curve to shift left (from S to S'). This is the opposite of the observed shift from S' to S, so this option is incorrect for explaining a rightward shift.
Option 3: a decrease in the number of buyers. A change in the number of buyers affects demand, not supply. A decrease in buyers would shift the demand curve left, not the supply curve, so it does not explain the shift from S' to S.
Option 4: an increase in the price of the good. A change in the price of the good itself causes movement along the same supply curve (a quantity supplied change), not a shift of the entire supply curve. Therefore it does not account for a shift from S' to S.
In summary, the plausible reason for a rightward shift from S' to S is the increase in the number of sellers, while the other options describe changes that would either shift the supply curve in the opposite direction, affect demand, or merely cause a movement along the curve rather than a shift.

Figure 4-6Refer to Figure 4-6. The shift from S' to S could be caused by

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