ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Supply curve shift: Changes in production cost and related factors can cause an entire supply curve to shift right or left. This causes a higher or lower quantity to be supplied at a given price. The ceteris paribus assumption: Supply curves relate prices and quantities supplied assuming no other factors change.

Detailed explanation-2: -A change in the number of sellers in an industry changes the quantity available at each price and thus changes supply. An increase in the number of sellers supplying a good or service shifts the supply curve to the right; a reduction in the number of sellers shifts the supply curve to the left.

Detailed explanation-3: -What is leftward shift in supply curve? A leftward shift of the supply curve is a representation of the decrease in the quantity of a product/service supplied at every given price.

Detailed explanation-4: -When supply decreases and the supply curve shifts to the left, the equilibrium price will increase and the equilibrium quantity will decrease. There is excess demand at the original price, P, when the supply curve shifts leftward which shortage in the market.

Detailed explanation-5: -The supply curve will move upward from left to right, which expresses the law of supply: As the price of a given commodity increases, the quantity supplied increases (all else being equal).