Cambridge International as and a level Economics Ebook

Shift s in the market supply curve
To this point our analysis of supply and the supply curve 
has assumed that price is the only factor that infl uences 
supply. While this is useful, one of the limitations is that 
companies’ supply intentions are infl uenced by factors other 
than the price of the product (which is the most tangible 
expression of consumers’ buying intentions). Other things 
are most certainly not always equal. Changes in these 
supply conditions can be shown by shift s in the supply 
curve. A rightward shift indicates an increase in supply; a 
left ward shift indicates a decrease in supply. Notice again 
how the language changes when we are talking about a 
shift 
in the whole curve rather than simply a 
movement
along 
it – a change in supply rather than a change in the quantity 
supplied (see 
Table 2.11
 and 
Figure 2.15
).
Price of a ‘standard’ 
PC (US$)
Quantity supplied per 
week – supply curve 
S
2
800
2,000
1,000
3,000
1,200
4,000
1,400
5,000
1,600
6,000
1,800
7,000
2,000
8,000
Table 2.11 
An increase in supply
3000
4000
S
0
0
S
2
Price (US$)
Quantity supplied
1200
1000
Figure 2.15 
A shift to the right in the market supply curve for PCs
Figure 2.15
 shows:
■ 
Companies are now more willing and/or more able to supply 
PCs at each and every price. Previously they had only been 
prepared to supply 3,000 units per week at $1,200; now they 
are prepared to supply 4,000.
■ 
Companies previously wanted $1,200 per unit to persuade 
them to supply 3,000 units per week; now they are prepared 
to accept $1,000.