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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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