Question

An extension of supply curve of Product X occurs when ______.

Options

• The price of the product increases

• The price of its inputs increases

• The price of the product decreases

• The price of its substitute decreases

Answer 1

An extension of supply curve of Product x occurs when the price of the product increases.

Explanation:

• An extension of supply occurs when there is an increase in the quantity supplied of a product in response to an increase in its price. This is represented by a movement along the supply curve to a higher quantity supplied, rather than a shift of the curve itself.
• When the price of Product X increases, suppliers are willing to supply more of the product, leading to an extension of the supply curve.