Figure 3-F -Refer to Figure 3-F.A Supply Shift from S0 to S1

question 126

Multiple Choice

Figure 3-F
-Refer to Figure 3-F.A supply shift from S0 to S1 can be best explained by:

• A)decrease in input prices.
• B)price decreases for a substitute in production.
• C)rise in taxes.
• D)a technological advance.

---

Definitions:

Consumer Surplus

The gap between the amount consumers are prepared to spend on a product or service and the amount they end up paying.

Excess Demand

A situation in which the quantity demanded of a good exceeds the quantity supplied at the existing price, often leading to a rise in price.

Supply Functions

Mathematical expressions that relate the quantity of a good that producers are willing to sell to the price of the good and other factors.

Demand Functions

Mathematical representations that describe the relationship between the quantity demanded of a good and its determinants like price, income, and preferences.