A Decrease in Supply

question 107

Multiple Choice

A decrease in supply:

• A)refers to a leftward shift in the supply curve.
• B)refers to a downward movement along a supply curve.
• C)has the same meaning as the phrase "a decrease in quantity supplied."
• D)is likely to result from the decrease in the price of a productive resource.

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Definitions:

Price Taker

A market participant that accepts prevailing prices as given, having no influence to alter the price of a good or service.

Marginal Revenue

The additional income from selling one more unit of a good; generally equal to the price of the good for perfectly competitive firms.

Differentiated Good

A Differentiated Good is a product or service that is distinct in some way from its competitors, whether through quality, features, branding, or customer service, allowing it to stand out in the marketplace.

Monopolistically Competitive

Describes a market structure where many firms sell products that are similar but not identical, leading to some degree of market power while still taking the market price as given.