Study Notes
Shifts in Market Supply
- Level:
- GCSE, AS, A-Level
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 26 Jan 2019
The supply curve can shift position
If the supply curve shifts to the right, this is an increase in supply; more is provided for sale at each price
If the supply curve moves inwards, there is a decrease in supply meaning that less will be supplied at each price
Make sure that you understand the key factors that can bring about a shift in the supply curve for a product in a market
Key summary
Factors that will cause an outward shift of a market supply curve i.e. an increase in supply
- The entry of new producers into the market
- A government subsidy to cover some of the supply costs of firms
- A fall in the world price of imported components and raw materials
- A reduction in the size of an indirect tax on producers
- An improvement in labour productivity which lowers unit labour costs
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