Which of the following will cause an outward (rightward) shift in supply?
Part 2
A.
The cost of an input increases.
B.
A decline in labor productivity.
C.
A technological improvement.
D.
A reduction in consumer incomes.
C. A technological improvement.
C. A technological improvement.
To determine which of the options will cause an outward (rightward) shift in supply, we need to understand the factors that affect supply.
Supply is influenced by various factors, such as input costs, productivity, technology, and consumer demand. An outward (rightward) shift in supply means that the quantity supplied at each price level increases.
Now, let's consider each option:
A. The cost of an input increases: An increase in input costs, such as raw materials or labor, would generally lead to a decrease in supply. This is because higher costs would reduce the profitability for suppliers, discouraging them from producing as much. Therefore, this option would not cause an outward shift in supply.
B. A decline in labor productivity: A decline in labor productivity means that workers can produce fewer goods or services in a given amount of time. This would result in a decrease in supply as well, as fewer products would be available to be sold. Hence, this option would not cause an outward shift in supply.
C. A technological improvement: Technological improvements positively affect supply. When new technology is introduced, it often enables producers to increase efficiency and productivity, resulting in a higher quantity of goods or services being supplied. Therefore, a technological improvement would cause an outward (rightward) shift in supply.
D. A reduction in consumer incomes: Consumer incomes primarily affect demand rather than supply. When consumer incomes decrease, it generally leads to a decrease in demand for goods and services, which might cause a decrease in supply. However, there is no direct relationship between a reduction in consumer incomes and a rightward shift in supply. Therefore, this option would not cause an outward shift in supply.
To summarize, option C (a technological improvement) is the only one that would cause an outward (rightward) shift in supply.