Supply Practice Test

Based on the supply curve shown, the question concerns a shift of supply. The government introduces a per-unit subsidy for producers that reduces firms’ effective costs. Which option best matches the shift shown in the graph?

(Use the graph to identify whether supply increased or decreased.)

Based on the supply curve shown, the economy experiences a shift of supply from $S_1$ to $S_2$ after firms adopt AI-driven inventory and logistics systems that raise productivity in the short run. Which change in a macro-level determinant of supply is most consistent with the shift shown in the graph?