Arrange the given statements to show the impact on a firm's supply curve due to its determinants. (A) Organisational innovation allows the firm to use fewer units of inputs. Choose the correct answer from the options given below. |
(A), (B), (C), (D) (B), (A), (C), (D) (B), (A), (D), (C) (C), (B), (D), (A) |
(B), (A), (D), (C) |
The correct answer is Option (3) → (B), (A), (D), (C) (B) Any factor that affects a firm’s marginal cost (MC) curve is a determinant of its supply curve. → This is the starting point, setting the condition for supply changes. (A) Suppose there is organisational innovation that allows the firm to use fewer inputs for the same output. → This is the specific factor affecting MC. (D) As a result, the marginal cost curve shifts downward (because production becomes cheaper). → This is the immediate impact on cost structure. (C) Therefore, at any given price, the firm can now supply more output. → This is the final effect on the supply curve. |