Question 4 (1 point)In the short run, a decrease in production costs of a product will shift aboth the demand curve and the supply curve to the right bthe demand curve to the left and the supply curve to the right conly the supply curve to the right donly the supply curve to the left eonly the demand curve to the left
Question
Question 4 (1 point)In the short run, a decrease in production costs of a product will shift aboth the demand curve and the supply curve to the right bthe demand curve to the left and the supply curve to the right conly the supply curve to the right donly the supply curve to the left eonly the demand curve to the left
Solution
The correct answer is c) only the supply curve to the right.
Here's why:
In economics, the supply curve represents the quantity of a good that producers are willing and able to sell at various prices. When production costs decrease, producers can afford to produce more of the good at the same price, or the same amount of the good at a lower price. This increases the quantity supplied at each price level, which is represented by a rightward shift of the supply curve.
On the other hand, the demand curve represents the quantity of a good that consumers are willing and able to buy at various prices. A decrease in production costs does not directly affect consumer preferences or income, so it does not shift the demand curve.
Therefore, a decrease in production costs will only shift the supply curve to the right.
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