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
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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?