Index
The Demand Curve 1
The Demand Curve 2
The Demand Curve 3
The Laws of Supply and Demand - 4
The Laws of Supply and Demand - 5
A ''Contraction'' of Demand - 6
''Ceteris Paribus'' - 7
An ''Expansion'' of Demand - 8
Marginal Utility - 9
Marginal Utility - 10
Marginal Utility - 11
Marginal Utility - 12
Consumer Surplus - 13
Consumer Surplus - 14
Price Discrimination - 15
An ''Expansion'' of Supply - 16
An ''Expansion'' of Supply - 17
Market Equilibrium - 18
Market Equilibrium - 19
Market Equilibrium - 20
Movements of the Demand Curve - 21
Movements of the Demand Curve - 22
Movements of the Demand Curve - 23
Inferior Goods - 24
Movements of the Demand Curve - 25
Movements of the Supply Curve - 26
Movements of the Supply Curve - 27
Movements of the Supply Curve - 28
The Income Effect - 29
The Substitution Effect - 30
The Substitution Effect - 31
The Substitution Effect - 32
The Substitution Effect - 33
Complements - 34
Complements - 35
Review: Factors Effecting Demand - 36
Review: Factors Effecting Demand - 37
The Goals of Firms - 38
The Goals of Firms - 39
To: Elasticity

Movements of the Supply Curve - 27

An increase in the number of firms operating in a market can also increase supply. Decreases in the cost of resources used in production (especially labour) can also shift the supply curve to the right. If all firms operating in the industry having have rising expectations of future profitability, all firms will increase production and increase supply. A lowering of business taxation, or an increase in subsidies given by Government can also increase supply.

Supply can decrease (a shift of the whole curve to the left) if the costs of production rise. Before the increase in costs, this firm could supply Qo of a good at price Po.

Now the firm can only supply Qo at price P1.

Pick any quantity you like : prior to the change in the conditions of supply, this quantity had a given price. After the change, the same quantity now costs more.