UESTION 4 According to the elimination principle what happen

UESTION 4 According to the elimination principle, what happens to the short-run supply in Industry X when demand rises in Industry X? You can assume Industry X is a decreasing cost industry O A supply will increase O B supply will decrease c , supply will remain the same this cannot be determined without more information

Solution

Option A

As the industry is cost decreasing, with the increase in production the cost per unit keeps on reducing which increases demand and hence the short run supply curve shifts to right.