₁, P_dos, and P_{step step 3} quantity supplied increases when supply increases causing a rightward shift in the supply curve. Similarly, progress in technology used for production of a commodity which increases productivity and reduces cost per unit will also cause the supply curve to shift to the right.

On the other hand, decrease in supply means the reduction in quantity supplied at each price of the commodity as shown in Figure 20.3 where as a result of decrease in supply the supply curve shifts to the left from SS to S’S’. As shown by the arrow marks, at each price such as P₁, P₂, P₃, the quantity supplied on the supply curve S”S” has declined as compared to the supply curve SS.

The new reduced amount of supply takes place when the costs from circumstances (inputs) useful for the creation of an item was delivered during the a higher cost each unit which causes a decrease in numbers supplied at each and every rates.

Furthermore, the imposition out of an excise obligation or sales taxation on the a beneficial product means that for every wide variety will now getting supplied during the an excellent high rate than ever to defense brand new excise responsibility otherwise transformation taxation each unit. Read more