Because the shown by the arrow marks, on price P

Because the shown by the arrow marks, on price P

1, Pdos, and Pstep three quantity supplied increases when supply increases causing a rightward shift in the supply curve. Similarly, progress in technology used for production of a commodity which increases productivity and reduces cost per unit will also cause the supply curve to shift to the right.

On the other hand, decrease in supply means the reduction in quantity supplied at each price of the commodity as shown in Figure 20.3 where as a result of decrease in supply the supply curve shifts to the left from SS to S’S’.


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