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