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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

Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter10: Financing And Producing Goods
Section: Chapter Questions
Problem 16AA
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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.
 

 

P S" S' S' $20 $12 $5 25К 40K 55 К Qs
Transcribed Image Text:P S" S' S' $20 $12 $5 25К 40K 55 К Qs
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