Figure 2. The initial supply of nails is S (in black), the initial price of a pound of nails is $12, and the initial quantity supply of nails is 40K pounds. Which of the following correctly describes the effect of a decrease in the supply of nails while the price of a pound of nails remains at $12? A) The supply curve shifts left to S'' (in red), and the quantity supply of nails decreases to 25K pounds. B) The supply curve remains
Figure 2. The initial supply of nails is S (in black), the initial price of a pound of nails is $12, and the initial quantity supply of nails is 40K pounds. Which of the following correctly describes the effect of a decrease in the supply of nails while the price of a pound of nails remains at $12? A) The supply curve shifts left to S'' (in red), and the quantity supply of nails decreases to 25K pounds. B) The supply curve remains
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Consider the supply of nails shown in Figure 2. The initial supply of nails is S (in black), the initial price of a pound of nails is $12, and the initial quantity supply of nails is 40K pounds. Which of the following correctly describes the effect of a decrease in the supply of nails while the price of a pound of nails remains at $12?
A) The supply curve shifts left to S'' (in red), and the quantity supply of nails decreases to 25K pounds.
B) The supply curve remains at S (in black), and the quantity supply of nails remains at 40K pounds.
C) The supply curve remains at S (in black), and the quantity supply of nails decreases to 25K pounds.
D) The supply curve shifts left to S'' (in red), and the quantity supply of nails remains at 40K pounds.
Transcribed Image Text:P
S"
S'
S'
$20
$12
$5
25К
40K
55 К
Qs
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