The supply curve shifts rightward as shown by the

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Unformatted text preview: e. animation 9160335_CH03_p053-080.qxd 6/22/09 8:56 AM Page 63 Supply FIGURE 3.6 A Change in the Quantity Supplied Versus a Change in Supply Price Figure 3.6 illustrates and summarizes these distinctions. If the price of the good falls and other things remain the same, the quantity supplied of that good decreases and there is a movement down along the supply curve S0. If the price of the good rises and other things remain the same, the quantity supplied increases and there is a movement up along the supply curve S0. When any other influence on selling plans changes, the supply curve shifts and there is a change in supply. If supply increases, the supply curve shifts rightward to S1. If supply decreases, the supply curve shifts leftward to S2. S2 S0 S1 Increase in quantity supplied Decrease in Increase in supply TABLE 3.2 63 supply The Supply of Energy Bars Decrease in quantity supplied The Law of Supply The quantity of energy bars supplied Decreases if: ■ The price of an energy bar falls Increases if: ■ The price of an energy bar rises Changes in Supply The supply of energy bars Decreases if: Increases if: ■ The price of a factor of production used to produce energy bars rises ■ The price of a factor of production used to produce energy bars falls ■ The price of a substitute in production rises ■ The price of a substitute in production falls The price of a complement in production falls ■ The price of an energy bar is expected to rise ■ ■ The number of suppliers of bars decreases ■ The number of suppliers of bars increases ■ A technology change decreases energy bar production ■ A technology change increases energy bar production A natural event decreases energy bar production ■ ■ ■ ■ The price of a complement in production rises The price of an energy bar is expected to fall A natural event increases energy bar production Quantity 0 When the price of the good changes, there is a movement along the supply curve and a change in the quantity supplied, shown by the blue arrows on supply curve S0. When any other influence on selling plans changes, there is a shift of the supply curve and a ch...
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This note was uploaded on 04/04/2012 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue University-West Lafayette.

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