Decrease in Supply

Definition

A decrease in supply refers to a situation where producers are able and willing to offer less of a product at each price level. This can be caused by factors such as higher production costs, scarcity of resources, or natural disasters affecting production.

Related terms

Shift in Supply Curve: A shift in the supply curve occurs when there is a change in any factor other than price that affects the quantity supplied at each price level.

Inelastic Supply: Inelastic supply means that even with changes in price, the quantity supplied does not change significantly.

Shortage: A shortage occurs when the quantity demanded exceeds the quantity supplied at a given price.