Question

Supply curve represents the relationship between product price and quantity of product that a seller is willing and able to supply. Shifting of supply curve rightward would imply which of the following?

A Increase in profits Correct Answer Incorrect Answer
B Decrease in profits Correct Answer Incorrect Answer
C Reduction in quantity supplied Correct Answer Incorrect Answer
D Reduction in price of its goods Correct Answer Incorrect Answer

Solution

· Supply curve of a firm tends to shift rightwards on account of enhanced profitability. Similarly it shifts leftwards when profit is reduced.
· Technological progress shift the curve rightwards, similarly reduced input cost and reduced unit tax would give the same output.
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