Factors that Shift the Supply Curve (Edexcel IGCSE Economics)
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Shifts of the Entire Supply Curve
There are several factors that will change the supply of a good/service, irrespective of the price level
Collectively, these factors are called the non-price determinants of supply
Changes to any of the non-price determinants of supply shift the entire supply curve (as opposed to a movement along the supply curve)
Diagram: Shifts of the Supply Curve
Changes to any of the non-price determinants of supply shift the entire supply curve left or right, irrespective of the price level
For example, if a firm's cost of production increases due to the increase in price of a key resource, then there will be a decrease in supply as the firm can now only afford to produce fewer products
This is a shift in supply from S to S1. The price remains unchanged at £7 but the supply has decreased from 10 to 2 units
An Explanation of each of the Non-price Determinants of Supply
Determinant | Explanation | Determinant Increases | Determinant Decreases |
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Costs of |
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Changes in technology |
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Indirect taxes |
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Subsidies |
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Change in the number of firms in the industry |
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Natural factors |
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