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All of the following will cause a shift in the supply of smartphones EXCEPT A

Economics Dec 12, 2020

All of the following will cause a shift in the supply of smartphones EXCEPT

A. an increase in the cost of producing smartphones.

B. a decrease in the number of smartphone manufacturers.

C. a decrease in the prices of smartphones.

D. a perminus-unit government subsidy on the production of smartphones.

Expert Solution

The correct choice is C.) A decrease in the prices of smartphones.

A shift in the supply curve occurs when a different amount is supplied at each and every price of a good and service. This occurs when the factors we keep constant in defining the supply schedule and supply curve change this is referred to as the change in supply.

The prices of a commodity cause a movement along the supply curve and not a shift. Therefore a decrease in prices of smartphones will result in a decrease in the amount supplied.

A. Where the cost of producing the smartphone increase the supply curve will shift inwards due to change in the cost of input of products.

B. When the number of manufacturers reduces it will lead to a decrease in the supply of smartphones in the markets hence supply curve shift to the left.

D. Where the government offer subsidy on the production of smartphones it will cause a rightward shift of the supply curve hence increase in supply.

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