Shift of Supply

If supply is constant, an increase in demand will result in an increase in both equilibrium price and quantity. A decrease in demand will cause both the equilibrium price and quantity to fall.

The supply function was expressed as Qxs = f(Px, Pinputs, Tech, regulations, N sellers,... NS),

A change in the price of the good changes the quantity supplied. A change in any of the other variables will shift the supply function.

An increase in supply can be visualized as a shift to the right, at each price a larger quantity is produced and offered for sale. A decrease in supply is a shift to the left; at each possible price a smaller quantity is offered for sale. If the supply shifts and demand remains constant, the equilibrium price and quantity will be altered.

Дата добавления: 2014-01-11