Google
Tuesday 
April 16, 2024 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
APP: The abbreviation of average physical product, which is the quantity of total output produced per unit of a variable input, holding all other inputs fixed. Average physical product, usually abbreviated APP, is found by dividing total physical product by the quantity of the variable input. Average physical product is actually just another name for average product (AP). But don't be confused by the extra term (physical).

Visit the GLOSS*arama


CHANGE IN SUPPLY:

A shift of the supply curve caused by a change in one of the supply determinants. A change in supply is caused by any factor affecting supply EXCEPT price. A related, but distinct, concept is a change in quantity supplied.
A change in supply is a change in the entire price-quantity relation that makes up the supply curve. It means that a different quantity supplied is paired with a given supply price or that a different supply price is paired with a given quantity supplied. The result of this repairing of prices and quantities is a repositioning, or a shift, of the supply curve.

The five supply determinants (resource prices, production technology, other prices, sellers' expectations, and number of sellers) are responsible for causing a change in supply. In fact, the only thing that DOES NOT cause a change in supply is the supply price.

Supply and Quantity Supplied

To set the stage for an understanding of this difference, take note of two related concepts:
  • Supply: Supply is the range of quantities that sellers are willing and able to sell at a range of supply prices. It is ALL points that make up a supply curve.

  • Quantity Supplied: Quantity supply is a specific quantity that sellers are willing and able to sell at a specific supply price. It is but ONE point on a supply curve.

Making Changes

So what happens when the phrase "change in" is placed in front of each term?
  • Change in Supply: A change in supply is a change in the ENTIRE supply relation. This means changing, moving, and shifting the entire supply curve. The entire set of prices and quantities is changing. In other words, this is a shift of the supply curve. A change in supply is caused by a change in the five supply determinants.

  • Change in Quantity Supplied: A change in quantity supplied is a change from one price-quantity pair on an existing supply curve to a new price-quantity pair on the SAME supply curve. In other words, this is a movement along the supply curve. A change in quantity supplied is caused by a change in price.

Changing Supply

A Change in Supply



A change in supply is a shift of the supply curve. A change in quantity supplied is a movement along a given supply curve. These alternatives can be illustrated with the positively-sloped supply curve presented in this exhibit. This supply curve captures the specific one-to-one, law of supply relation between supply price and quantity supplied. The five supply determinants are assumed to remain constant with the construction of this supply curve.
  • A Change in Supply: A change in supply, which is triggered by a change in any of the five supply determinants, is a shift of the supply curve. Click the [A Determinant Change] button to demonstrate.

  • A Change in Quantity Supplied
    : A change in quantity supplied, which is only triggered by a change in supply price, is a movement along the supply curve. Click the [A Price Change] button to demonstrate.

An Important Difference

Why is this difference so important? The answer is as simple as cause and effect. The supply curve is used (together with demand) to explain and analyze market exchanges. The sequence of events follows a particular pattern.
  • First, a supply (or demand) determinant changes.

  • Second, this determinant change causes the supply curve (or demand curve) to shift.

  • Third, the change in supply (or demand) causes either a shortage or a surplus imbalance in the market. The market is in a temporary state of disequilibrium.

  • Fourth, the shortage and surplus imbalance causes the price of the good to change.

  • Fifth, the change in price causes a change in quantity supplied (and demanded).

  • Sixth, the change in quantity supplied (and demanded) eliminates the shortage or surplus and restores market equilibrium.

The key conclusion is that supply (and demand) determinants, which induce changes in supply (and demand), are the source of instability in the market. The change in price, which induces a change in quantity supplied (and demanded) is the means of eliminating the instability and restoring equilibrium.

<= CHANGE IN REAL PRODUCTIONCHECK CLEARING =>


Recommended Citation:

CHANGE IN SUPPLY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 16, 2024].


Check Out These Related Terms...

     | change in quantity supplied | change in demand | change in quantity demanded |


Or For A Little Background...

     | supply determinants | supply price | quantity supplied | law of supply | supply curve | ceteris paribus | supply | market supply | cause and effect |


And For Further Study...

     | market | Marshallian cross | comparative statics | competitive market | producer surplus | demand determinants | competition | exchange | change in aggregate supply |


Search Again?

Back to the WEB*pedia


APLS

BEIGE MUNDORTLE
[What's This?]

Today, you are likely to spend a great deal of time browsing through a long list of dot com websites wanting to buy either a how-to book on home repairs or a large, stuffed kitty cat. Be on the lookout for broken fingernail clippers.
Your Complete Scope

This isn't me! What am I?

A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
"Recipe for success. Study while others are sleeping; work while others are loafing, prepare while others are playing, and dream while others are wishing."

-- William A. Ward

VES
Variable Elasticity of Substitution
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2024 AmosWEB*LLC
Send comments or questions to: WebMaster