Question

I dont understand that why the answer is E not A, can someone explain it to me in details? thank you so much

3.2 Supply 8 of 8 (8 complete) 3.2 Question 31 (Algo) The graph below shows different supply curves. Click the icon to view the graph for the supply curves. A shift of the supply curve from Sto scould be caused by O A a decrease in the price of energy-efficient light bulbs. B. an increase in the price of energy-efficient light bulbs. OC. an expectation that new government regulations will ban the use of energy-efficient light bulbs OD. a decrease in average income that enforces consumers to buy less expensive energy-efficient light bulbs. DE a decrease in the price of glass, a major input in the production of energy-efficient light bulbs.

Answer 1

The option A cannot be the answer because the price changes is a movement along the supply curve. When the price changes only the quantiy supplied changes and not the supply. The supply changes only due to the changes in non price factors such as the changes in technology, input costs, taxes, business confidence etc.... ( There is difference in quantity supplied and supply).

In this the supply curve shifts to the right and this is an increase in the supply. The glass is an input for the production of energy efficieny bulbs so when there is a decrease in the price of galss the firm could be able to produce more energy efficient lights so the supply increases and the supply curve shifts to the right.