Examkin

Soru

Zorluk: OrtaConcept and Law of Supply

A commercial rice miller in Kano increased monthly production from 500500 bags to 750750 bags after the market price of rice rose from N35,000\text{N}35,000 to N48,000\text{N}48,000 per bag, while technology and input prices remained unchanged. Which of the following best describes this scenario?

  1. An increase in quantity supplied represented by a movement along the existing supply curve.Cevap
  2. B
    An increase in supply represented by a rightward shift of the supply curve.
  3. C
    A shift in supply caused by government price control mechanisms.
  4. D
    A decrease in opportunity cost leading to a structural expansion of market capacity.

Cevap

An increase in quantity supplied represented by a movement along the existing supply curve.
The scenario describes a producer increasing output in response solely to a higher market price for the product while all non-price factors remain constant. According to the law of supply, this price-driven adjustment is an increase in quantity supplied, represented graphically as a upward movement along the existing supply curve.

Adım Adım Çözüm

1
Identify the cause of the change in production volume.
Production increased from 500500 to 750750 bags in direct response to a rise in the market price of rice from N35,000\text{N}35,000 to N48,000\text{N}48,000.
Price change of the commodity itself is the independent variable.
2
Check for non-price conditions.
Technology and input prices remained unchanged (ceteris paribus condition holds).
This isolates the price effect from non-price supply shifts.
3
Apply economic concepts to determine the graphical representation.
A change in the price of the good itself causes a movement along the supply curve (change in quantity supplied), rather than a shift of the curve.
The law of supply states that price and quantity supplied are directly related, ceteris paribus.

Anahtar Kavram

Difference between a change in quantity supplied (movement along the curve due to price changes) and a change in supply (shift of the curve due to non-price factors).
Bu soruyu puanla

Konular

Concept and Law of Supply

Bu konudan daha fazla soru