Question

If the X axis is quantity and the Y axis is price, which of the following is the best summarization shift of the supply shift from S1 to S2?
a) the supply decreased
b) the supply stayed the same
c) the supply increased
d) the supply outweighed demand

Answer 1

This type of graph is commonly used when looking st the effect of supply and demand on the quantity and price of the products. From the Law of Supply, it states that as the price of a quantity increases, supply increases as well. If price falls, supply decreases. In other words, the slope of the supply line is positive.

So if there is a supply shift, the slope remains the same but it would either move to the left or right of the graph. Because the problem did not specify what happens from S1 to S2, the answer could either be A or C. As to which of these two is the answer, just refer to the Law of Supply.