Diagrams that illustrate shifts of a supply curve

What is a Supply Curve?

A supply curve shows the relationship between the price of a good and the quantity that producers are willing to sell. It usually slopes upwards because higher prices give producers an incentive to produce more.

Mathematically we can write a simple supply function as:

$Q_s = a + bP$

where $a$ is the base quantity supplied and $b$ is the slope (how much quantity changes for each unit change in price).

Why Does the Supply Curve Shift?

Things that change the cost of production, technology, or expectations can shift the whole supply curve left (decrease) or right (increase). Think of a bakery that gets a brand‑new oven: it can bake more bread at the same cost, so the supply curve shifts right.

• Technology improvements → supply increases (right shift)
• Higher input costs (e.g., wheat price rises) → supply decreases (left shift)
• New regulations or taxes → supply decreases
• Expectations of future price changes → supply can shift in either direction

Illustrating Supply Shifts with a Table

Below is a simple table that shows how the quantity supplied changes at different prices when the supply curve shifts.

Notice how the new supply quantities (with the 📈 or 📉 emoji) are higher or lower than the original at the same price.

Analogy: The School Library

Imagine the school library is a market for books. The supply curve is like the number of books the library can lend out at each price (or at each “interest rate” if you think of it as a loan). If the library gets a new computer system that lets them catalogue books faster, they can lend out more books at the same price – that’s a rightward shift. If the cost of books rises because the publisher increases prices, the library can’t afford as many books, so the supply curve shifts left.

Exam Tip Box

When you’re answering a question about a supply shift, always:

1. Identify the cause (e.g., technology, input cost, taxes).
2. State the direction of the shift (right for increase, left for decrease).
3. Explain the effect on equilibrium price and quantity.
4. Use the diagram (or a table) to show the new equilibrium.

Remember: Supply shifts change the entire curve, not just the price at a single quantity.

Quick Practice Question

Suppose the price of coffee beans rises by 10 %. What happens to the supply curve of coffee, and how will the equilibrium price and quantity change? Sketch your answer using the table format above.