A Change in Supply due to a Change in Non-Price Factors
- Costs or production, size and nature of the industry, government policy and other uncontrollable factors can result in the change in supply of a product
- This means that a different quantity is now being supplied at the same price
- When this occurs, the supply curve is being shifted to either the left or the right
- There are 2 possibilities:
- An increase in supply, meaning that more will be supplied at the same price
- g. tax reduction or technological advance – shift to the right
- A decrease in supply, where less of a product is being supplied at the same price
- g. increased tax or a more expensive factor of production – shift to the left
- A change in supply must not be confused with a change in the quantity supplied, which is due to the price of the product alone
- An increase in supply, meaning that more will be supplied at the same price
