Home › CA Foundation › Business Economics › Supply › A change in the quantity supplied of a good caus…
A change in the quantity supplied of a good caused only by a change in that good's own price is shown on a diagram as a:
Arightward shift of the whole supply curve
Bmovement along the existing supply curve
Cleftward shift of the whole supply curve
Drotation of the supply curve about its origin
Answer & Solution
Correct answer: B. movement along the existing supply curve
1. The good's own price is the variable measured on the curve's axis.
2. A change in own price moves the seller to a different point on the same curve.
3. This is a change in quantity supplied, i.e. a movement along the curve.
4. Shifts are reserved for changes in non-price determinants, which are ruled out here.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit III "Supply", p.4_
Related questions
A noted exception to the law of supply is the supply of labour, where at very high wage raAn increase in the number of firms selling a good in a market, other things constant, willSocial efficiency in a competitive market is achieved at the equilibrium price because at Producer surplus in a market is best described as the benefit producers gain because the pIf the supply of bottled water decreases while demand stays the same, the new market equilIf, at the prevailing price, the quantity demanded of a good exceeds the quantity suppliedIn a market, the demand and supply schedule shows that at Rs 3 quantity demanded equals quThe market price of a good is the level at which the wishes of buyers and sellers coincide