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complements in production
. Goods in joint 
supply include, for example, meat and hides. If the price of beef rises, more will be supplied and 
there will be an accompanying increase in the supply of cow hide. 
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PART A: THE BUSINESS ORGANISATION, ITS STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT 
 
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(c) 
Expectations of price changes
. If a supplier expects the price of a good to rise, they are likely to 
try to reduce supply while the price is lower so that they can supply more of their product or 
service once the price is higher. 
(d) 
Changes in technology
. Technological developments which reduce costs of production (and 
increase productivity) will raise the quantity of supply of a good at a given price. 
(e) 
Other factors
. These include changes in the weather (for example, in the case of agricultural 
goods), natural disasters or industrial disruption. 
The supply curve shows how the quantity supplied will change in response to a change in price. If 
supply conditions
alter, a different supply curve must be drawn. In other words, a change in price will 
cause a change in supply 
along the supply curve
. A change in other supply conditions will cause a 
shift 
in the supply curve itself
. 
5.6 Shifts of the market supply curve 
The 
market supply curve
 
is the aggregate of all the supply curves of individual firms in the market. A 
shift of the market supply curve occurs when supply conditions (other than the price of the good itself) 
change. Figure 7 shows a shift in the supply curve from S
0
to S
1
. A 
rightward
(or 
downward
) shift of the 
curve shows an expansion of supply and may be caused by the factors below. 
(a) 
A fall in the cost of factors of production, for example a reduction in the cost of raw material 
inputs 
(b) 
A fall in the price of other goods; the production of other goods becomes relatively less attractive 
as their price falls and firms are therefore likely to shift resources away from the goods whose 
price is falling and into the production of higher priced goods that offer increased profits. We 
therefore expect that (
ceteris paribus
) the supply of one good will rise as the prices of other 
goods fall (and vice versa). 
(c) 
Technological progress, which reduces unit costs and also increases production capabilities 
(d) 
Improvements in productivity or more efficient use of existing factors of production, which again 
will reduce unit cost 
A shift of the supply curve is the result of changes in costs, either in absolute terms or relative to the 
costs of other goods. If the price of the good is P
1
, suppliers would be willing to increase supply from Q
0
to Q
1
under the new supply conditions (Figure 7). 
Conversely, we might see a