Economics_Ch05

# We can understand shifts in supply curves better with

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Unformatted text preview: decreases, the supply curve shifts to the left. We can understand shifts in supply curves better with the help of Exhibit 5-4. Look at the curve labeled S1 in Exhibit 5-4. Suppose this supply curve represents the original (and current) supply of computers. Notice that the quantity supplied at a price of \$1,000 is 4,000 computers. Now suppose the supply of computers increases. For whatever reason, people want more computers. This increase in supply is shown by 0 1,000 2,000 3,000 4,000 5,000 6,000 Quantity supplied of computers Moving from S1 (the original supply curve) to S2 represents a rightward shift in the supply curve. Supply has increased. Moving from S1 to S3 represents a leftward shift in the supply curve. Supply has decreased. the supply curve S1 shifting to the right and becoming S2. What does it mean for a supply curve to shift rightward? The answer is easy if you Section 2 The Supply Curve Shifts 117 05 (110-127) EMC Chap 05 11/17/05 4:51 PM Where Do TiVo, Podcasts, and Blo...
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