0
They are downward in the sense that the second derivative is negative. This means that there are diminishing costs with production. This usually occurs due to economics of scale which lower the AFC and MC as more units are produced. Generally, as quantity approaches infinity, fixed cost/units produced approaches 0.
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Which direction would the supply curve shift if there was a decrease in supply?
leftward
A leftward shift in supply curve of product x will increase equilibrium price to a greater extent?
the moe elastic the supply curve
Leftward shift in the supply curve?
A leftward shift in the supply curve would mean that some outside (Macro-economic) or inside (Micro-economic) event occurred that caused the supplier of the good to not be willing to make as many at a lower price. The price of the good/service will increase. The new price will be at the new (higher) intersect of the supply and demand curves (equilibrium).
What are factors affecting supply curve?
A change in supply (a shift in the supply curve) occurs whenever some factor that affects the supply of the good, other than its price, changes. Such variables include:1. Prices of productive resources. A rise (fall) in the prices of resources shifts the supply curve leftward (rightward).2. An increase in technology shifts the supply curve rightward.3. An increase (decrease) in the number of suppliersshifts the supply curve rightward (leftward).4. Prices of other goods produced, which have two possible relationships:a) When the price of a substitute in production rises (falls), the supply curve for the good shifts leftward (rightward).b) A rise (fall) in the price of a complement in production shifts the supply curve rightward (leftward).5. If the expected future price of the product rises (falls), the supply curve in the present period shifts leftward (rightward).A change in supply also affects the price and quantity of the product.1. An increase in supply (a shift rightward of the supply curve) causes the price to fall and the quantity to increase.2. A decrease in supply (a shift leftward in the supply curve) causes the price to rise and the quantity to decrease
What causes technology supply curve to shift?
a change in amount of goods available
