Question
7. New factory machines allow GMC to produce more cars more efficiently.How does this affect the Supply schedule? Increase Decrease Factor that shifts the supply line:
Answer
4.7
(217 Votes)
Isabelle
Master · Tutor for 5 years
Answer
Increase
Explanation
Supply schedule in economics is a table that shows the quantity suppliers are willing to supply at different given prices during certain period. It's all about the relationship between the price and quantity supplied. Factors like improvement in technology or efficiency can shift the supply schedule. If new factory machines allow GMC to produce more cars efficiently, it means production cost will be reduced. When the cost of production decreases, suppliers will be able to supply more even if the price in market remains the same. This explains an increase in the supply schedule. Therefore, the correct answer should be a factor that would increase the supply.