ACCA Applied Knowledge · Business and Technology · Microeconomic factors
Which of the following would cause the supply curve for a manufactured good to shift to the right?
A technological improvement that lowers production cost shifts supply right, because firms can profitably offer more at each price. Changes in income, complement prices and tastes are demand determinants and move the demand curve instead.
- AAn increase in consumers' incomes
- BA technological improvement that lowers production costCorrect
- CA rise in the price of a complementary good
- DA change in consumer tastes towards the good
Explanation
Cost-reducing technology lets firms supply more at every price, shifting supply right. The other options are demand-side factors (income, complements, tastes) which shift the demand curve.
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