IGCSE Economics Paper-1: Specimen Questions with Answers 63 - 63 of 64

Question 63




An outward shift in the supply curve is caused by:


Choice (4)
a.Rise in factors other than price
b.A rise in the price of commodity
c.Change in demand of the commodity.
d.A fall in the price of commodity




Supply refers to the quantity of a good or service that a supplier supplies in the market. Various factors and circumstances affect a seller’s willingness or ability to produce and sell a good. Some of the actors are:

  • An increase in price of a product will induce an increase in the quantity supplied and vice versa.
  • Prices of related goods refer to goods from which inputs are derived for the production of the primary good.
  • If there is a technological advancement in the production technique, the supply increases.
  • Sellers’ expectations of future market conditions can directly affect supply.
  • High price of inputs will shift the supply curve left, as sellers are less willing to sell goods at a low price.
  • Intervention (in the form of taxes, subsidies, working hours etc. ) from government can affect a good’s supply.

However, some factors other than price can cause a shift in the production level. For example, a technological improvement reduces cost of production, which will shift the supply curve outward.

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