Shift in supply curve
Also called: Change in supply · Topic: Theory of the Firm, Supply and Perfect Competition · NCERT: Class 12, Ch 4 "The Theory of the Firm under Perfect Competition"; Class 12, Ch 5 "Market Equilibrium"
Meaning
A shift in the supply curve means the whole curve moves because of a factor other than the good's own price. A rightward shift (increase in supply) means more is offered at every price. A leftward shift (decrease in supply) means less is offered. Causes include technology, input prices, taxes and subsidies, prices of related goods, the number of firms and producers' expectations.
Example
Better cold storage lets mangoes reach distant markets, so market supply shifts right. A rise in wages shifts supply left. A unit tax of ₹t shifts supply left, moving it up by exactly t.
Don't confuse with
- Movement along the supply curve: this is caused only by a change in the good's own price. A price rise is an extension of quantity supplied, and a price fall is a contraction. The terms "increase" and "decrease" in supply describe shifts only.