Question

In your own words, explain the difference between a movement along the supply curve and a shift in supply. Then, provide an example from your own personal life where you have experienced each one.

Answer 1

Movement along the supply curve:  

Movement along the supply curve is caused by the change in price of commodity. there is positive relationship between the supply and price. More commodity is supplied at higher price, less quantity is supplied at lower price. Hence, There is movement along the supply curve.

Shift in Supply curve:

Supply is affected by many factors. Factors other than the price causes shift in supply curve. Such as change in technology causes rightwards shift in supply curve. Shift in supply curve denotes that either more or less quantity is supplied at same price level.

Example:

taking up an example of Mobile Phone, initially rise in demand and price caused rise in supply of mobile phone. Since now it was profitable to supply more mobile phones. But gradually technology improved, now at same price more mobile phones were supplied by the firms owing to reduced cost of production.