The Supply Curve Might Shift Inwards with Less Supplied at Each

question 10

Multiple Choice

The supply curve might shift inwards with less supplied at each price if:

• A) There are less firms producing.
• B) There are lower production costs.
• C) The market price falls.
• D) There is an improvement in the level of technology in the industry.

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Definitions:

Variable Cost

Overheads that see variation directly aligned with output quantities.

Operating Leverage

The degree to which a company can increase its profits by increasing sales, highlighting the fixed versus variable costs structure.

Base-Case Scenario

In financial modeling and decision making, it refers to the standard set of assumptions used as a baseline for projecting the financial performance or outcome of a project.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the percentage of fixed versus variable costs that a company has.