Question

In this exhibit (Simultaneous Shifts in Demand and Supply), D1 and S1 are original supply and demand curves, and S2 and D2 are new curves. In this market, the change in supply may have resulted from: Select one: a. wage increases for the workers. b. an improvement in technology. c. a decrease in the number of sellers. d. all of the above.

Answer 1

Answer:

Simultaneous Shifts in Demand and Supply

In this market, the change in supply may have resulted from:

b. an improvement in technology.

Explanation:

An improvement in technology is the only correct option that can cause the change in supply from S1 to S2.  Wage increases for the workers increase the cost of production, which can decrease sales volume.  Similarly, a decrease in the number of sellers will most likely reduce sales volume instead of increasing it.