Change in Supply and Shift in Supply and Shift in Suyppclurve

CHANGE IN SUPPLY AND SHIFT IN SUPPLY

Change in supply means increase or decrease in quantity supplied at the same price. This is explained with the help of a diagram.

X axis-----Quantity Supplied

Y axis------Price

SS- Supply Curve

Explanation: The figure shows that as the price of a commodity increases from P to P1, the supply also increases fro m Q to Q1. It means that price & supply are directly related. The movement of the supply is along the same curve. In other words increase in supply is known as extension of supply & decrease in supply is known as contraction of supply.

SHIFT IN SUYPPCLURVE

Shift in supply means shifting the entire supply curve due to various reasons other than price like changes in technolo gy, government policies etc. This is explained with the help of a diagram.

X axis-----Quantity Supplied

Y axis------Price

Explanation: The figure shows that as the price of a commodity does not change but still the supply curve shifts from SS TO S1S1 OR S2S2. It means shifting the entire supply curve is due to various reasons other than price like changes in technology, government policies etc.