Shifters in demand vs. supply for switches market

Steps:

• Equilibrium X to Y likely shows rightward demand shift, raising price and quantity of switches due to more house construction.
• Option A increases house buying, boosting demand for switches in new homes.
• Option B subsidizes brick houses, increasing overall house builds and switch demand.
• Option C reduces switch costs directly, shifting supply right instead of demand.
• Option D lowers wood import costs, encouraging more house construction and switch demand.

Why C is correct:

• Removing sales tax on switches decreases production/selling costs, shifting supply curve right (law of supply: lower taxes increase quantity supplied at each price), not demand.

Why the others are wrong:

• A: Easier loans raise housing demand, increasing derived demand for switches.
• B: Brick house subsidies expand housing output, raising switch demand.
• D: Tariff removal cuts wood prices, stimulating house building and switch demand.

Final answer: C