Fall in input costs shifts supply rightward

Steps:

• Identify the cause: lower oil price reduces fuel production costs.
• Determine market effect: suppliers offer more fuel at each price, shifting supply curve right.
• Predict equilibrium: new intersection lowers price and raises quantity.
• Match to diagram: select one showing rightward supply shift with higher quantity.

Why D is correct:

• D depicts a rightward supply shift, per the law of supply where lower input costs increase quantity supplied at every price.

Why the others are wrong:

• A shows rightward demand shift, which raises price and quantity but ignores input cost change.
• B shows leftward supply shift, which raises price and lowers quantity, opposite of cost reduction.
• C shows leftward demand shift, which lowers price and quantity but doesn't reflect supply-side cause.

Final answer: D