6. What could cause the supply curve for solar panels to shift to the right?

Question

BlackTom AI · Accepted Answer

A supply curve shifts right when producers can supply more of a good at every price—this typically happens when production becomes cheaper or more efficient.

1) Relevant knowledge points and concepts
- Supply curve: relationship between price and quantity supplied.
- Shift of the supply curve vs movement along the curve: a shift means supply changes at every price (caused by non-price factors); a movement along the curve is caused by a change in the good’s own price.
- Common non-price determinants: production technology, input (raw material) costs, taxes/subsidies, number of sellers, expectations.

2) Step-by-step reasoning
- Determine whether each option is a non-price factor that increases producers’ ability to supply at each price.
- If the factor reduces production costs or increases productivity, suppliers can produce more at all prices → supply curve shifts right (increase in supply).
- If the factor increases costs or reduces incentives, supply decreases → shift left.
- If the option is a change in the product’s own price, that causes movement along the supply curve, not a shift.

3) Calculations
- No numerical calculations are required; reasoning is qualitative about direction of supply changes.

4) Why the correct answer is correct
- A technological breakthrough in solar panel production lowers production costs and/or raises output per input. That allows firms to supply more panels at every market price, which is precisely an increase in supply—represented by a rightward shift of the supply curve.

5) Why the other options are incorrect
- a. Increase in cost of raw materials raises production costs, reducing supply → shift left, not right.
- b. Decrease in government subsidies reduces producer incentives or raises effective costs → supply shifts left.
- d. Increase in the price of solar panels is a change in the product’s own price and causes a movement along the existing supply curve (higher quantity supplied), not a shift of the curve.

6) Conclusion
Therefore the correct answer is c. A technological breakthrough in solar panel production, which matches the provided answer.

6. What could cause the supply curve for solar panels to shift to the right?Single choice

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