Question

If the demand curve for a good is horizontal and the price is positive, then a leftward shift of the supply curve results in _________.

• A. price changing to zero
• B. an increase in price
• C. a decrease in price
• D. no change in price

Answer 1

The correct option is D no change in price

If the demand curve for a good is horizontal and price is positive, a leftward shift of the supply curve results in no change in the price of the commodity but would change the quantity. When there is a leftward shift of supply curve there is a fall quantity supplied.