If the number of sellers decreases, then the supply curve and the supply A) shifts rightward; increases B) shifts rightward; decreases C) shifts leftward; decreases D) does not shift: does not change, but there is a decrease in the quantity supplied E) shifts leftward; increases
The Correct Answer and Explanation is :
When the number of sellers decreases, the supply curve typically shifts to the left. This is because fewer sellers in the market means less of the good or service is available for sale at each price level, resulting in a decrease in the overall supply.
The correct answer is:
C) shifts leftward; decreases
Explanation:
In economics, the supply curve represents the relationship between the price of a good or service and the quantity that producers are willing to offer at each price point. This curve generally slopes upward, indicating that as prices increase, the quantity supplied increases, and vice versa.
When the number of sellers in a market decreases, it means that fewer producers are willing or able to offer goods for sale. This reduction in the number of suppliers results in a lower overall supply in the market, causing the entire supply curve to shift to the left. As a result, at any given price, the quantity supplied is now lower than before, and the supply itself has decreased.
This shift in the supply curve is not due to a change in the price of the good itself, but rather due to a change in the number of sellers, which is a non-price determinant of supply. The decrease in supply leads to a reduction in the quantity available in the market, and typically, this would lead to a rise in the price of the good, assuming demand remains constant.
In summary, when the number of sellers decreases, the supply decreases, and the supply curve shifts to the left. Therefore, the correct answer is C).