Shift in Supply Curve

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The changes in a supply curve can occur due to various factors. One of these changes is known as the shift in supply curve. Let us see what is meant by shift in supply curve.

Shift in Supply Curve

A supply curve is drawn to show the relationship between price and quantity supplied of a commodity assuming all other factors being constant. Although in reality, these factors do not always remain constant and are bound to change at some point. This change in other factors, i.e. factors other the the price of the commodity, cause a shift in the supply curve.




For example, an increase in excise duty on a commodity will raise its cost of production which will lead to a fall in profit thus causing a decrease in the supply of the commodity even though its market price has not undergone any change. Such a decrease in supply cannot be represented by the original supply curve. It will lead to a shift in supply curve.

When supply of a commodity changes due to change in any factor other than the own price of the commodity, it is known as ‘change in supply’. It is graphically represented by a shift in the supply curve.

Shift in Supply Curve

In the diagram given above, supply is OQ at the price OP. Change in other factors leads to a rightward or leftward shift in the supply curve –

  1. Rightward Shift – When supply rises from OQ to OQ1 at the same price OP, it leads to a rightward shift in the supply curve from SS to S1S1.
  2. Leftward Shift – When supply decreases from OQ to OQ2 at the same price of OP, it causes a leftward shiftin the supply curve from SS to S2S2.

Increase in Supply

Increase in supply refers to a rise in the supply of a commodity caused due to any other factor than the own price of the commodity. In such a scenario, the supply may rise at the same price or it may even stay the same at a lower price.

Shift in Supply Curve

As seen in the diagram and schedule given above, even though the price remains the same, the supply rises from 100 to 150 units, resulting in a rightward shift in the supply curve from SS to S1S1.




Decrease in Supply

Decrease in supply refers to a fall in the supply of a commodity caused due to any other factor than the own price of the commodity. In this case supply may fall at the same price or may even remain the same at a higher price.

Shift in Supply Curve

As seen in the diagram and the table given above, even though the price of the commodity remains the same, the supply of the commodity decreases from 100 to 70 units, resulting in a leftward shift from SS to S2S2.




Microeconomics Class 12 Notes – Chapter 11

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