A fall in the quantity supplied caused by a fall in the product's own price is called which term?

A fall in the quantity supplied caused by a fall in the product's own price is called which term?

• A. Extension in Supply
• B. Contraction in Supply
• C. Change in Supply
• D. Decrease in Supply

Answer: (B)

When the price of a good changes, the quantity supplied moves along the existing supply curve. A fall in price leads to a contraction in supply: producers offer fewer units at the lower price, so the quantity supplied decreases along the same curve. This is a movement along the curve, not a shift of the entire curve. By contrast, an extension in supply would occur if the price rises, increasing quantity supplied along the curve. A change in supply would mean the curve itself shifts due to non-price factors like technology or costs. A decrease in supply refers to a leftward shift of the curve, not a change caused by price. So the term for a fall in quantity supplied caused by a fall in price is contraction in supply.

When the price of a good changes, the quantity supplied moves along the existing supply curve. A fall in price leads to a contraction in supply: producers offer fewer units at the lower price, so the quantity supplied decreases along the same curve. This is a movement along the curve, not a shift of the entire curve. By contrast, an extension in supply would occur if the price rises, increasing quantity supplied along the curve. A change in supply would mean the curve itself shifts due to non-price factors like technology or costs. A decrease in supply refers to a leftward shift of the curve, not a change caused by price. So the term for a fall in quantity supplied caused by a fall in price is contraction in supply.