In contrast to demand, supply curve shifts will be downwards (or to the right) if sellers are able to increase production, while the supply curve will shift upwards (or to the left) is the opposite occurs.

Another example may be the corn market. If technological innovation means that crop yields become higher, this will cause the supply curve to shift from S0 to S1. The result of this will be the quantity of corn rising from Q0 to Q1, while the price of corn will fall from P0 to P1.

Previous Topic

Back to Lesson

Next Topic