What is the effect of a decrease in production costs on the supply curve?

Show Answers

Cause movement along the supply curveCause a shift in the demand curveCause the supply curve to shiftResult in an increase in quantity supplied along the curve

Explanation

A decrease in production costs makes it cheaper to produce goods, which increases supply at every price level. This causes the entire supply curve to shift, rather than just a movement along the curve. Demand curves are not affected by production costs.