Part B: An increase in supply is represented by the movement from S2 to

Question

Part B: An increase in supply is represented by the movement from S2 to

BlackTom AI · Accepted Answer

When analyzing supply, an increase in supply is depicted by a shift of the entire supply curve to the right, not by a movement along a single curve. If the diagram labels S2 and S1 such that S1 lies to the right of S2, then the correct representation of an increase in supply is the shift from the original curve S2 to the new, more outward curve S1. This reflects that at every price level, more of the good is supplied than before due to non-price determinants (inputs, technology, expectations, etc.).

It is important to distinguish this from a movement along a single supply curve: a movement upward or downward along S2 would indicate a change in quantity supplied caused by a change in price, not an overall increase in supply.

In this particular item, you’re told the answer is S1, which aligns with the standard depiction of an outward shift in supply (rightward shift) indicating an increased quantity supplied at each price point. If S1 is actually to the left of S2 in the graph you’re using, then that would not represent an increase in supply, and the labeling would be inconsistent with the typical interpretation. However, given the provided answer, the intended interpretation is that S1 is the new, rightward-shifted supply curve representing higher supply.

ECON_002_001_25F Problem Set 1

Part B: An increase in supply is represented by the movement from S2 to

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ECON_002_001_25F Problem Set 1

Part B: An increase in supply is represented by the movement from S2 to

View Explanation

Log in for full answers

Similar Questions

An improvement in production technology will shift the

Part D: An increase in the price of pizza sauce will cause a movement from point B on supply curve S2 to

What effect would a new tax on producers likely have on the supply curve?

A student says “Supply of ice cream increases with increasing population”. How will you show this change in the market diagram?

A student says “Supply of ice cream decreases with decreasing population”. How will you show this change in the market diagram?

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

Select the correct answer about the figure above.

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

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Making Your Study Simpler

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