How do u show a shift in the supply curve?
Answers
The factors other than price affect the supply curve in a different manner. These factors cause the supply curve to shift. Of course, this shift is also categorized into two which are a leftward and rightward shift.
Note that, this shift occurs because the price is constant when studying the effect of other factors on supply. A rightward shift indicates a positive effect on the curve whereas a leftward shift indicates a negative effect on the supply curve. We have already studied the various factors other than price and their relationship with the supply of a commodity. The factors can either have a direct or an inverse relationship with the quantity of commodity supplied.
Factors like the state of technology have a direct relationship with the supply. In other words, the change in such factors and supply occurs in the same direction. As a result, an increase in such factors leads to a shift in the rightward direction. Conversely, a decrease in such factors causes the curve to shift towards left.
Factors like the price of other goods tend to be in an inverse relationship with the supply of a commodity. Simply put, a change in such factors and supply occurs in opposite direction. A negative change in such factors induces a positive change in supply and vice versa. In effect, an increase in such factors leads to a shift in leftward direction. However, a decrease of such factors causes the supply curve to shift towards the right.