Shifts in the Supply Curve

Because the market supply curve holds other things constant, the curve shifts when one of the factors changes. For example, suppose tin.' price of sugar falls. Sugar is an input into producing ice cream, so the fall in the price of sugar makes selling icecream more profitable This raises the supply of icecream: At any given price, sellers are now willing to produce a larger quantity. The supply curve for ice cream shifts to the right.

Figure 7 illustrates shifts in supply. Any change that raises quantity supplied at every price, such as a fall in the price of sugar, shifts the supply curve to the right and is called an increase in supply. Similarly, any change that reduces the quantity supplied at every price shifts the supply curve to the left and is called a decrease in supply.

There are many variables that can shift the supply curve. Here arc some of the most important.

Input Prices To produce their output of ice cream, sellers use various inputs: cream, sugar, flavoring, ice-cream machines, the buildings in which the ice cream is made, and the labor of workers to mix the ingredients and operate the machines.

Was this article helpful?

0 0
The Secrets Of Winning Business Grants

The Secrets Of Winning Business Grants

Why Some Grant Applications Almost Always Win A Double Take And Get Approved More Often! How To Write A Winning Grant Application In One Evening. Are you looking to secure extra money for your business venture?

Get My Free Ebook


Post a comment