A Leftward Shift of the Supply Curve in a Market

question 113

Multiple Choice

A leftward shift of the supply curve in a market with a downward-sloping demand curve will lead to a(n)

• A)increase in equilibrium price.
• B)excess demand at the old equilibrium price.
• C)decrease in quantity demanded.
• D)All of the above.

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Definitions:

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable change.

Producer Surplus

The gap between what sellers are prepared to take for a product or service and the actual amount they get.

Inelastic

This refers to a lack of sensitivity in the quantity demanded or supplied when the price changes.

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to a change in price.