Shifts in the supply curve

Shifts in the supply curve are brought about by changes in factors other than the price of the commodity. A shift in supply is indicated by an entire movement (shift) of the supply curve to the right (downwards) or to the left (upwards) of the original curve.

When supply increases, the supply curve shifts to the right from S₁S₁ to S₂S₂. At price P₁, supply increases from q1 to q'₁ and at price P₂ supply increases from q₂ to q'₂. Conversely, a fall in supply is indicated by a shift to the left or upwards of the supply curve and less is supplied at all prices. Thus, when supply falls, the supply curve shifts to the left from position S₂S₂ to position S₁S₁. At price p₁, supply falls from q_'1 to q₁ and at price p₂, supply falls from q'₂ to q₂.