Movement Along a Supply Curve - Video Tutorials & Practice Problems
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Shifting Supply - Warning!
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So in the same manner that we were shifting demand. Now we're gonna find the factors that shift supply. So again, I have this warning here, right, that a change in price does not shift the supply curve, right? It's already a variable on our graph. Right? Our axes are price and quantity. So price changes are not going to make us draw a new supply curve. So let's go ahead and move into this box and we'll do an example. So a change in price when we see a change in price, what's gonna happen? We have our supply curve here are price and quantity axis. Alright. And let's say we started at this price right here in the middle, that was our original price and our original quantity. So original price P. One. Our original quantity Q. One. And now let's say that the price of the product decreased, Right? So now we're gonna be at this price right here, Excuse me, This price down here, P. Two. And let's see what happens. So notice the price changed. We're not drawing a new graph, a new line. We're just moving along the supply curve that's already there. Right? So the quantity is gonna decrease, just like the law of supply tells us because the price decrease, right? We're staying on the same line just moved to the left there on the line. Cool. So let's compare that to when other determinants of supply change right? When we have some of the factors that are gonna shift the graph. So let me get out of the way here. And let's do uh an example of a supply shift. So if we're going to shift the graph, let's say some factor cause is a good thing to happen in supply, and we're gonna shift the graph to the right. Um We would draw a new line parallel to the one that's already there and that is gonna be our new supply. So where this was supply one, this is supply two over here, right? And we have effectively shifted to the right in this situation. Um So when I notice that when we have a change in price, what we're going to have is an increase or a decrease in the quantity supplied, right? This goes hand in hand with our discussion about quantity demanded versus demand. This is quantity supplied versus a change in supply here on the right hand side, right? So when we draw a new line, it's as if we do we have a change in supply when we're just moving along the line because of a change in price, it's a change in quantity supply, right? And I have these notes about all else equal else not equal. Just like with demand, right? We're holding everything equal. Um When we do our analysis, so when we just have a change in price, pretty simple, everything is equal except for that change in price, we're holding all else equal. And over here we're still holding all else equal. It's just that this one factor change. So if nothing else changes except this one factor, what's gonna happen? Well, we're gonna shift the line like this. Cool. Alright, let's finish up this page on the next video.