Question

If a firm faces _____________________, while the prices for the output the firm produces remain unchanged, its supply curve will shift right, indicating an increase in supply.

A. higher demand
B. lower costs of production
C. equilibrium
D. a shift in demand

Answer 1

If a firm faces lower costs of production, then its supply curve will shift to the right.

Step-by-step explanation:

If a firm faces lower costs of production, then it will earn higher profits at any given selling price for its products. As a result, a lower cost of production typically causes a firm to supply a larger quantity at any given price. In this case, the supply curve shifts to the right.