a) Supply

a) the distinction between movements along a supply curve and shifts of a supply curve

b) the factors that may cause a shift in the supply curve (the conditions of supply)

supply = the amount of a good or service that firms are willing and able to supply at a given price and time

supply curve

a change in only the price causes

• a change in the quantity supplied

• a movement along the supply curve

price decreases

• quantity supplied decreases

• contraction in quantity supplied

price increases

• quantity supplied increases

• extension in quantity supplied

the conditions of supply = the factors other than price that change the supply

a change in the conditions of supply → a change in supply

if supply decreases → supply curve shifts left

if supply increases → supply curve shifts right

examples of conditions of supply

• a change in the cost of production

• a change in agricultural conditions

• a change in the number of firms that sell the good or service