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Question
When supply curve shifts to the right, _________.
A. There is excess supply
B. There is deficient supply
C. Prices tend to fall
D. Prices tend to rise
When supply curve shifts to the right, _________.
A. There is excess supply
B. There is deficient supply
C. Prices tend to fall
D. Prices tend to rise
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Solution
The correct option is B A and C is correct
When the supply curve shifts to the right, the quantity available for supply is more. Hence, the supply is in excess quantity. Also, because the supply is more and available with different sellers, the prices of the commodities fall. This is a direct effect of the supply curve shifting towards right.
When the supply curve shifts to the right, the quantity available for supply is more. Hence, the supply is in excess quantity. Also, because the supply is more and available with different sellers, the prices of the commodities fall. This is a direct effect of the supply curve shifting towards right.
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