Supply Curve Shifts: Diagrammatic Description and Interpretation

This lecture focuses on understanding and interpreting shifts in the supply curve. It begins with a recap of the law of supply and the derivation of the supply curve under the assumption of ceteris paribus. The lecture then explores the effects of removing this assumption, leading to shifts in the supply curve due to other factors. Two types of shifts are discussed: outward shifts, which increase quantity supplied at each price, and inward shifts, which decrease it. The lecture concludes with a summary and a preview of the next topic, which will cover the causes of supply curve shifts.

What is the primary focus of this lecture?

• Calculating equilibrium price

• Diagrammatically describing shifts in the supply curve

• Understanding demand curve shifts

• Analyzing consumer behavior

What happens to the supply curve during an outward shift?

• It becomes a horizontal line

• It moves down and to the right

• It remains unchanged

• It moves up and to the left

How does an inward shift in the supply curve affect the quantity supplied?

• Increases the quantity supplied at each price

• Decreases the quantity supplied at each price

• Leaves the quantity supplied unchanged

• Causes the supply curve to disappear

What causes a movement along the supply curve?

• A change in production technology

• A change in consumer preferences

• A change in price

• A shift in the demand curve

What assumption is made when deriving the supply curve?

• The market is in equilibrium

• All factors except price are variable

• Ceteris paribus, all other factors remain constant

• The demand curve is fixed