Own-price change causes movement along supply curve

Steps:

• Recall supply curve shifts from non-price factors like input costs or technology; own-price changes cause movement along the curve.
• Assume S₂ represents a point further along the existing supply curve due to higher quantity supplied.
• Analyze options: A and C alter production costs/productivity (shifts); B impacts competitors (possible shift); D changes output price (movement).
• Conclude D moves quantity supplied to the S₂ position on the same curve.

Why D is correct:

• Law of supply states higher price of tractors incentivizes more production, increasing quantity supplied along the curve.

Why the others are wrong:

• A: Raises input costs, shifting supply left to new curve.
• B: Affects rival US output prices, potentially shifting Indian supply but not along curve.
• C: Boosts efficiency, shifting supply right to new curve.

Final answer: D