Why would an increase in the number of suppliers lead to a shift in the supply line?

Prepare for the RECA Commercial Exam. Study with flashcards and multiple choice questions, with hints and explanations. Be exam-ready!

An increase in the number of suppliers contributes to a shift in the supply curve primarily because it enhances the overall market's capacity to produce and offer goods or services. When more suppliers enter the market, the competition rises, leading to an increase in the total quantity of goods supplied at each price level. This is due to each supplier contributing their production capacity, which collectively enhances the availability of products for consumers.

As suppliers compete, they may produce more to capture market share, which directly increases the total supply. This shift in the supply line reflects a greater quantity available to consumers at various price points, making the market more responsive to changes in consumer demand.

In contrast, an increase in suppliers does not inherently drive prices up, reduce consumer interest, or leave supply unchanged. Thus, the correct answer underscores how more suppliers augment the total quantity available in the market, influencing economic dynamics effectively.

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