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The supply curve of a given commodity is given to be `S_(0)`. On the basis of this diagram, answer the following questions: Increases in cost of production of this commodity will lead to :A. Movement from `S_(0)` to `S_(1)`B. Movement form `S_(0)` to `S_(2)`C. Upward movement along the `S_(0)`D. No change at all |
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Answer» Correct Answer - A Increase in the cost of production reduces the profit margin of this particular commodity and hence supply falls and there is a movement from So to S1. |
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