Final answer:
A fall in production costs leads to an increase in supply and a rightward shift of the supply curve, indicating that the firm can supply more at every price point.
Step-by-step explanation:
A fall in production costs will result in a increase in supply and a rightward shift of the supply curve. When a firm experiences a decrease in production costs, possibly due to an improvement in technology, it can supply a larger quantity of its products at any given price. This scenario is represented by a rightward (or downward) shift in the supply curve because the firm is more willing to supply at lower prices.
Conversely, if a firm faces higher costs of production, it leads to lower profits at any given selling price, causing the firm to supply a smaller quantity at that price. This situation would be reflected as a leftward shift in the supply curve. These shifts in the supply curve are fundamental concepts in understanding market behavior and economics