Chapter 6, Problem 2MCQ

To determine

The question requires us to determine the impact of the increased number of producers on the supply curve.

Explanation of Solution

An increase in the number of producers causes the production level to increase in the market and results in a higher market supply.

An increase in supply will cause the supply curve to shift rightward.

Thus, option “b” is correct.

Economics Concept Introduction

Any change in supply will shift the supply curve while any change in quantity supplied will cause the movement along the supply curve.

The supply of a commodity will change due to the following reasons:

• Change in price of relative goods (substitutes and complementary products) 
• Change in technology
• Change in input prices
• Change in expectations
• Change in the number of producers

Any change in the price of the commodity changes the quantity supplied.