Question

Which events could cause the change in supply shown on this graph? Check all that apply.

A producer goes out of business.
A new company joins the marketplace.
A natural disaster causes production to drop.
A company begins to produce more goods.

Answer 1

Check:
- A producer goes out of business. (Yes — reduces market supply, shifts the supply curve left.)
- A new company joins the marketplace. (Yes — increases market supply, shifts the supply curve right.)
- A natural disaster causes production to drop. (Yes — reduces supply, shifts the supply curve left.)

Do not check:
- A company begins to produce more goods. (No — that's an increase in quantity supplied by that firm, usually a movement along the supply curve unless it's caused by a change in production capacity or other supply determinant.)