Rightward Supply Curve Shift Means Increased Supply

Steps:

• Recall: Supply curve shifts right when more quantity is supplied at every price, due to favorable production changes.
• Identify factors: Lower costs, subsidies, better technology, or fewer regulations increase supply.
• Evaluate options: Check which option reduces producer costs or incentives.
• Select: Only subsidies directly boost supply by aiding producers.

Why A is correct:

• Subsidies reduce effective production costs, allowing more output at each price per the law of supply.

Why the others are wrong:

• B: Increases demand curve, not supply; demand shifts affect price but not supply curve position.
• C: Raises production costs, shifting supply left (decreased supply).
• D: Directly increases costs, shifting supply left (decreased supply).

Final answer: A