Shifts of the Supply Curve
There are several factors that will change the supply of a good/service, irrespective of the price level. Collectively these factors are called the conditions of supply.
Changes to any of the conditions of supply shifts the entire supply curve (as opposed to a movement along the supply curve).
A graph that shows how changes to any of the conditions of supply shifts the entire supply curve left or right, irrespective of the price level
For example, if a firm's cost of production increases due to the increase in price of a key resource, then there will be a decrease in supply as the firm can now only afford to produce fewer products.
○ This is a shift in supply from S to S1. The price remains unchanged at £7 but the supply has decreased from 10 to 2 units.
How Each of the Conditions of Supply Shifts the Entire Supply Curve
What role do expectations about future prices play in determining current supply levels?
How does the availability of resources affect the supply of a product?
What are some examples of external factors, like natural disasters, that can disrupt supply chains?
How do changes in the number of suppliers in a market impact overall supply?