Shifts in the Supply Curve

The factors which impact quantity supplied are the price of inputs, improvements in technology, the number of suppliers and prices of related goods.

A fall in the price of inputs, increase in the level of technology, increase in the number of suppliers, rise in the price of a complementary good or fall in the price of a substitute will result in a rightward shift of the supply curve as shown in the graph below.

Figure 3.5

Figure 3.5 above shows that at any given price level, suppliers are willing to supply more commodities.

On the other hand, a rise in the price of inputs, rise in the price of a substitute, fall in the price of a complement or decrease in the number of suppliers cause a leftward shift in the supply curve. This is also shown in the diagram below.

Figure 3.6

Figure 3.6 above shows that at any given price level, suppliers are now willing to supply less of a commodity.

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