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Question
Increase or decrease in supply means ______.
Options
shift of supply curve
movement along the supply curve
elastic supply
None of these
Solution
Increase or decrease in supply means shift of supply curve.
Explanation:
- An increase or decrease in supply refers to a change in the quantity supplied at every price level, resulting in the entire supply curve shifting to the right (increase in supply) or the left (decrease in supply).
- This differs from a movement along the supply curve, which occurs due to a change in the price of the good itself, leading to a change in the quantity supplied without shifting the curve.
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RELATED QUESTIONS
Due to installation of a machine with latest technology, the cost of production has decreased. It will lead to ______.
Match the following and select the correct option.
| Column I | Column II |
| (i) Expansion of supply | (A) Prices are expected to fall in future |
| (ii) Decrease in supply | (B) Fall in prices |
| (iii) Contraction of supply | (C) Prices are expected to rise in future |
| (iv) Increase in supply | (D) Rise in prices |
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