Shift in the Supply Curve

Definition

A shift in the supply curve occurs when there is a change in any factor other than price that influences how much producers are willing and able to sell at each possible price level. It represents a change in supply rather than just movement along the existing supply curve.

Related terms

Factors of Production: These are resources used by firms/producers such as labor, capital, land, and entrepreneurship. Any changes in these factors can lead to a shift in the supply curve.

Technology: Advances in technology can increase efficiency and lower production costs, leading to an outward shift in the supply curve.

Taxes and Subsidies: Taxes increase production costs, shifting the supply curve inward, while subsidies reduce production costs and shift the supply curve outward.