If you appreciate our work, consider supporting us:
QUESTION:
7. Movements along versus shifts of supply curves
Consider the market supply of scones.
Complete the following table by indicating whether an event will cause a movement along the supply curve for scones or a shift of the supply curve for scones, holding everything else constant.
Event
Movement Along
Shift
An increase in the number of producers
A change in technology that makes it more costly to produce scones
A decrease in the price of scones
ANSWER:
Complete the following table by indicating whether an event will cause a movement along the supply curve for scones or a shift of the supply curve for scones, holding everything else constant.
Event
Movement Along
Shift
An increase in the number of producers
A change in technology that makes it more costly to produce scones
A decrease in the price of scones
Points:
1 / 1
Close Explanation
Explanation:
The supply curve for scones shows the relationship between the price of scones and the quantity of scones supplied by producers, assuming that all of the determinants of supply are held constant. The following list displays determinants of supply, which are the factors that affect the quantity of scones producers want to sell at a given price:
Determinants of Supply
•
Price of inputs
•
Production technology
•
Number of producers
•
Expectations of producers
Therefore, if the price of scones changes, the result is a movement along the supply curve from the old price to the new one. However, if a change occurs in any of the factors that determine supply, the result is a shift of the supply curve. The following graphs illustrate an example of a movement along the supply curve and a shift of the supply curve:
