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  Raise or reduce in supply

Shifts in supply or raise or reduce in supply:

Augment or reduction in supply causes shifts in the supply curve. A shift in the supply curve is due to the modification in other factors that is, other than the price of the commodity. It is illustrated in the figure shown below:

1737_raise or reduce in supply.jpg

At price OP, SS is the supply curve previous to the modification in other factors. S1S1 exhibits a raise in supply since at similar price OP or TE more is provided for sale that is, OT1. S2 S2 exhibits reduce in supply since at similar price OP or TE, less is provided for sale that is, OT2.

 

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