Distinguishing Supply Shifts vs. Movements

Steps:

• Identify shift causes: Changes in input costs, technology, taxes, or seller numbers move the entire supply curve.
• Identify movement causes: Price changes of good X cause quantity supplied to change along the fixed curve.
• Evaluate each option for both effects: Shifts from non-price factors; movements from price-driven demand changes.
• Select option combining a supply shifter and a demand change leading to price adjustment.

Why D is correct:

• An increase in industry tax rates shifts supply left (higher costs reduce supply at every price, per supply determinants); a demand change shifts demand, raising price and causing movement along the new supply curve (law of supply).

Why the others are wrong:

• A: Decrease in input costs for X shifts supply right; substitute price increase affects demand, not directly supply movement.
• B: Input price increase shifts supply left; productivity increase shifts right—both shifts, no movement.
• C: Similar to B—both elements cause shifts only, no price-driven movement.

Final answer: D