Question

I got an answer for #1 but I'm not 100% o it and have no idea about 2 and 3. the options are

shift in

shift out

move-along upwards

move-along downwards

a. A fall in the price of tablets will cause a shift out in the Supply Curve for tablets. b. An increase in the price of aluminium (an input to tablets) will cause a (Click to select) in the Supply Curve for tablets. c. An increase in the local number of electronics stores will cause a Click to select) a in the Supply Curve for tablets.

Answer 1

Answer

a. A fall in the price of tablets will cause a move-along downwards in the supply curve for tablets.

The supply curve of a commodity shows the relationship between the price of the commodity, and the quantity supplied of the commodity, keeping other factors of supply constant. When the price of a commodity falls, then the quantity supplied of the commodity also falls. As a result, the price-quantity point moves downward along the supply curve. So, when the price of tablets falls, the quantity supplied of tablets will also fall. Thus, the fall in the price of tablets will cause a move-along downwards in the supply curve for tablets

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b. An increase in the price of aluminium( an input to tablets) will cause a shift in the supply curve for tablets.

When the price of an input of production increases, it will cause the increase in the cost of production. As a result, at the same cost of production as before, the producer will now produce lesser quantity of output. With the decrease in the quantity of production, the supply will also decrease.Thus, at the same price level, the quantity of supply will decrease, which will cause the supply curve to shift leftward, i.e., shift in supply curve.

Thus, an increase in the price of aluminium( an input to tablets) will cause a rise in the cost of production of tablets, which in turn will shift in the supply curve for tablets.

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c. An increase in the local number of electronics stores will cause a shift out in the supply curve for tablets.

An increase in the local number of electronics stores will increase the supply of tablets in the market. As a result, at the same price level, the market supply will increase, which in turn will cause a rightward shift of the supply curve of tablets. So, an increase in the local number of electronics stores will cause a shift out in the supply curve for tablets.

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