Questions and Answers
What does a movement from Point A to Point B in Figure 3-3 represent?
An increase in supply
Which of the following is a possible explanation for a change from Point A to Point B in Figure 3-3?
A decrease in the cost of production
What is the difference between a movement from Point A to Point B and a shift from Supply 1 to Supply 2 in Figure 3-3?
A movement is a change in quantity supplied, while a shift is a change in supply
If a firm moves from Point A to Point B in Figure 3-3, what can be said about the price and quantity supplied?
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What is the relationship between the price and quantity supplied in Figure 3-3?
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Study Notes
Supply and Demand Graph Analysis
- A movement from Point A to Point B on a supply and demand graph represents a change in the supply or quantity supplied.
- This movement can be classified into four possible scenarios: increase in supply, decrease in supply, increase in quantity supplied, or decrease in quantity supplied.
Change in Supply vs. Quantity Supplied
- A change from Point A to Point B in Figure 3-3 represents a change in supply or quantity supplied.
- The correct answer depends on the direction of the movement:
- If the movement is from left to right, it represents an increase in quantity supplied.
- If the movement is from right to left, it represents a decrease in quantity supplied.
- A shift of the entire curve to the right represents an increase in supply, while a shift to the left represents a decrease in supply.
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Description
Understand how to analyze movements on a supply and demand graph, identifying changes in supply or quantity supplied. Learn to classify these changes into four possible scenarios.
