Question
When economists say the quantity supplied of a product has decreased, they mean the:
a. price of the product has fallen, and consequently, suppliers are producing less of it.
b. price of the product has risen, and consequently, suppliers are producing more of it.
c. supply curve has shifted to the right.
d. supply curve has shifted to the left.
a. price of the product has fallen, and consequently, suppliers are producing less of it.
b. price of the product has risen, and consequently, suppliers are producing more of it.
c. supply curve has shifted to the right.
d. supply curve has shifted to the left.
Ask by Sherman Johnson. in the United States
Jan 24,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
When economists say the quantity supplied of a product has decreased, they mean the price of the product has fallen, and suppliers are producing less of it.
Solution
When economists refer to a decrease in the quantity supplied of a product, they are specifically talking about a movement along the existing supply curve, typically in response to a change in the product’s price. Here’s a breakdown of the options:
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a. Price of the product has fallen, and consequently, suppliers are producing less of it.This is correct. A decrease in the product’s price leads to a movement down along the supply curve, resulting in a lower quantity supplied.
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b. Price of the product has risen, and consequently, suppliers are producing more of it.This describes an increase in quantity supplied, not a decrease.
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c. Supply curve has shifted to the right.A rightward shift in the supply curve indicates an increase in supply, not related to a change in quantity supplied.
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d. Supply curve has shifted to the left.A leftward shift in the supply curve indicates a decrease in supply, which is different from a decrease in quantity supplied.
Answer:
a. price of the product has fallen, and consequently, suppliers are producing less of it.
a. price of the product has fallen, and consequently, suppliers are producing less of it.
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Simplify this solution The Deep Dive
When economists mention a decrease in the quantity supplied, they are typically referencing a situation where the supply curve has shifted to the left. This shift indicates that at every price level, suppliers are willing to produce and sell less of the product, often due to factors like increased production costs or external events impacting supply chains.
It’s essential to distinguish between a decrease in quantity supplied and a decrease in supply. The first refers to a movement along the curve caused by price changes, while the latter involves the entire supply curve shifting due to various influences, such as government policies or changes in technology affecting overall production capacity.
