Shift or change in supply
Shift or change in supply
If supply changes due to change in the factors other than price, then it is called change or shift in supply change in supply. Change in supply includes increase in supply and decrease in supply.
A) Increase in supply:
If supply rises due to change in the factors other than price, then it is called increase in supply.
Diagram:
If more quantity is supplied at the same quantity is supplied at a lower price then it is called increase in supply.
In the above diagram "SS" is the initial supply curve. Point "A" shows when price is "P" then 'OQ' is quantity supplied.
To show the increase in supply, we have to draw a new supply curve I.e. 'S1 S1' to the right of the original supply curve. Point 'b' shows that more quantity is supplied I.e. 'OQ1' at the same price I.e. 'OP' . here, the shift of the supply curve I.e. from point 'a' to 'b' shows the change in supply.
B) Decrease in supply:
If the quantity supplied falls due to change in the factors other than price then it is called decrease in supply.
In other words, if less quantity is supplied at the same price or same quantity is supplied at a higher price than it is called decrease in supply.
Diagram:
To show the decrease in supply, we have to draw a new supply curve to the left of the original supply curve. Accordingly "S1 S1" , supply curve is drawn.
"SS" is the initial supply curve. When price is 'OP' quantity supplied is ' OQ' . when supply falls supply curve shift to the left I.e. "S1S1" . Now at the same price I.e. 'OP' quantity supplied falls to " OQ" . This shift of supply from point "a" to point " b " shows the decrease in supply.
If supply changes due to change in the factors other than price, then it is called change or shift in supply change in supply. Change in supply includes increase in supply and decrease in supply.
A) Increase in supply:
If supply rises due to change in the factors other than price, then it is called increase in supply.
Diagram:
In the above diagram "SS" is the initial supply curve. Point "A" shows when price is "P" then 'OQ' is quantity supplied.
To show the increase in supply, we have to draw a new supply curve I.e. 'S1 S1' to the right of the original supply curve. Point 'b' shows that more quantity is supplied I.e. 'OQ1' at the same price I.e. 'OP' . here, the shift of the supply curve I.e. from point 'a' to 'b' shows the change in supply.
B) Decrease in supply:
If the quantity supplied falls due to change in the factors other than price then it is called decrease in supply.
In other words, if less quantity is supplied at the same price or same quantity is supplied at a higher price than it is called decrease in supply.
Diagram:
"SS" is the initial supply curve. When price is 'OP' quantity supplied is ' OQ' . when supply falls supply curve shift to the left I.e. "S1S1" . Now at the same price I.e. 'OP' quantity supplied falls to " OQ" . This shift of supply from point "a" to point " b " shows the decrease in supply.
No comments