Question
How would supply shift caused by lower costs of production affect price and quantity?
(1 point)
(1 point)
Answers
GPT 3.5
A supply shift caused by lower costs of production would lead to a decrease in price and an increase in quantity.
When the costs of production decrease, producers are able to produce goods or services at a lower cost. This allows them to lower their prices and still make a profit. As a result, the supply curve shifts to the right, indicating an increase in supply.
With a lower price, consumers are more willing and able to purchase the product, leading to an increase in demand. The combination of increased supply and increased demand results in a higher quantity being produced and consumed in the market.
When the costs of production decrease, producers are able to produce goods or services at a lower cost. This allows them to lower their prices and still make a profit. As a result, the supply curve shifts to the right, indicating an increase in supply.
With a lower price, consumers are more willing and able to purchase the product, leading to an increase in demand. The combination of increased supply and increased demand results in a higher quantity being produced and consumed in the market.