Does a change in producers’ technology lead to a movement along the supply curve or a...

Does a change in producers’ technology lead to a movement along the supply curve or a shift in the supply curve? Does a change in price lead to a movement along the supply curve or a shift in the supply curve? Give Examples of that.

Solutions

Expert Solution

Change in producers technology leads to shift in supply curve, while change in price leads to movement along supply curve

Explanation--------

# SHIFT IN SUPPLY

Shift in supply curve means a graphical presentation of change in supply due to change in factors other than price. It may be ----

Increase in supply

Decrease in supply

In such case there is no change in price

Examples

-Change in govt policy --

-- taxation or subsidy

- change in input price

- change in price of other goods

-. Change in number of firms in the industry

- Natural factors( calamities)

# MOVEMENT ALONG SUPPLY CURVE

It is a graphical representation of change in quantity supplied due to change in the price of product.It may be----

Extension of supply--- upward movement of supply curve due to rise in price

Contraction of supply---- downward movement of supply curve due to fall in price

Shift in supply curve

Movement along supply curve

Rahul Sunny answered 1 year ago

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