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Increase and decrease in supply

When the supply curve shifts to right as a result of a change in one of the factors that influence the quantity supplied other than the commodity’s own price, we say there is an increase in supply. When these factors cause the supply curve to shift to left, we say it as decrease in supply.
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Supply may increase and decrease due to the following factors

Increase in supply

(A rightward shift in the supply curve)


  • Fall in the price of substitutes
  • ƒFall in the cost of production
  • ƒFavourable changes in Government policy
  • ƒImprovement in techniques of production

Decrease in supply

(A leftward shift it the supply curve)


  • Rise in the price of substitutes
  • ƒRise in the cost of production
  • ƒUnfavourable changes in Government policy
  • Obsolete techniques of production

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