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A-Level Economics · Shift in supply diagram question

What could cause this rightward SHIFT of the supply curve?

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The diagram

The answer

A fall in firms' production costs. A non-price factor changed: cheaper inputs or better technology mean more is supplied at EVERY price. The classic trap, and it costs marks every year: a change in the good's OWN price moves you ALONG the supply curve — an extension or a contraction. Only non-price factors (costs, technology, taxes, subsidies, the number of firms) SHIFT the curve.

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This is one of 6 questions on the shift in supply diagram — every corner lettered, every wrong answer diagnosed.

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