So in the same manner that we were shifting demand, now we're going to find the factors that shift supply. So again, I have this warning here, right, that a change in price does not shift the supply curve, right? It's already a variable on our graph, right? Our axes are price and quantity, so price changes are not going to make us draw a new supply curve. Let's go ahead and move into this box, and we'll do an example. So a change in price. When we see a change in price, what's going to happen? We have our supply curve here, our price, and our quantity axes. Right? And let's say we started at this price right here in the middle. That was our original price and our original quantity. So original price p1, our original quantity q1, and now let's say that the price of the product decreased. Right? So now we're going to be at this price right here or excuse me this price down here p2 and let's see what happens. So, notice the price changed. We're not drawing a new graph, a new line, we're just moving along the supply curve that's already there, right? So the quantity is going to decrease just like the law of supply tells us because the price decreased, right? We're staying on the same line, just moved to the left there on the line. Cool. So let's compare that to when other determinants of supply change right. When we have some of the factors that are going to shift the graph. So, let me get out of the way here and let's do an example of a supply shift. So if we're going to shift the graph, let's say some factor causes a good thing to happen in supply and we're going to shift the graph to the right, we would draw a new line parallel to the one that's already there and that is going to be our new supply. So where this was supply 1, this is supply 2 over here, right, and we have effectively shifted to the right in this situation. So, when notice that when we have a change in price, what we're going to have is an increase or decrease in the quantity supplied. Right. This goes hand in hand with our discussion about quantity demanded versus demand. This is quantity supplied versus a change in supply here on the right-hand side, right. So when we draw a new line, it's as if we have a change in supply. When we're just moving along the line because of a change in price, it's a change in quantity supplied, right. And I have these notes about all else equal, all else not equal, just like with demand, right. We're holding everything equal when we do our analysis. So when we just have a change in price, pretty simple. Everything's equal except for that change in price. We're holding all else equal and over here we're still holding all else equal, it's just that this one factor changed. So if nothing else changes except this one factor, what's going to happen? Well, we're going to shift the line like this. Cool? Alright. Let's finish up this page on the next video.
Table of contents
- 1. Introduction to Macroeconomics1h 57m
- 2. Introductory Economic Models59m
- 3. Supply and Demand3h 43m
- Introduction to Supply and Demand10m
- The Basics of Demand7m
- Individual Demand and Market Demand6m
- Shifting Demand44m
- The Basics of Supply3m
- Individual Supply and Market Supply6m
- Shifting Supply28m
- Big Daddy Shift Summary8m
- Supply and Demand Together: Equilibrium, Shortage, and Surplus10m
- Supply and Demand Together: One-sided Shifts22m
- Supply and Demand Together: Both Shift34m
- Supply and Demand: Quantitative Analysis40m
- 4. Elasticity2h 26m
- Percentage Change and Price Elasticity of Demand19m
- Elasticity and the Midpoint Method20m
- Price Elasticity of Demand on a Graph11m
- Determinants of Price Elasticity of Demand6m
- Total Revenue Test13m
- Total Revenue Along a Linear Demand Curve14m
- Income Elasticity of Demand23m
- Cross-Price Elasticity of Demand11m
- Price Elasticity of Supply12m
- Price Elasticity of Supply on a Graph3m
- Elasticity Summary9m
- 5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
- Consumer Surplus and WIllingness to Pay33m
- Producer Surplus and Willingness to Sell26m
- Economic Surplus and Efficiency18m
- Quantitative Analysis of Consumer and Producer Surplus at Equilibrium28m
- Price Ceilings, Price Floors, and Black Markets38m
- Quantitative Analysis of Price Ceilings and Floors: Finding Points20m
- Quantitative Analysis of Price Ceilings and Floors: Finding Areas54m
- 6. Introduction to Taxes1h 25m
- 7. Externalities1h 3m
- 8. The Types of Goods1h 13m
- 9. International Trade1h 16m
- 10. Introducing Economic Concepts49m
- Introducing Concepts - Business Cycle7m
- Introducing Concepts - Nominal GDP and Real GDP12m
- Introducing Concepts - Unemployment and Inflation3m
- Introducing Concepts - Economic Growth6m
- Introducing Concepts - Savings and Investment5m
- Introducing Concepts - Trade Deficit and Surplus6m
- Introducing Concepts - Monetary Policy and Fiscal Policy7m
- 11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
- Calculating GDP11m
- Detailed Explanation of GDP Components9m
- Value Added Method for Measuring GDP1m
- Nominal GDP and Real GDP22m
- Shortcomings of GDP8m
- Calculating GDP Using the Income Approach10m
- Other Measures of Total Production and Total Income5m
- Consumer Price Index (CPI)13m
- Using CPI to Adjust for Inflation7m
- Problems with the Consumer Price Index (CPI)6m
- 12. Unemployment and Inflation1h 22m
- Labor Force and Unemployment9m
- Types of Unemployment12m
- Labor Unions and Collective Bargaining6m
- Unemployment: Minimum Wage Laws and Efficiency Wages7m
- Unemployment Trends7m
- Nominal Interest, Real Interest, and the Fisher Equation10m
- Nominal Income and Real Income12m
- Who is Affected by Inflation?5m
- Demand-Pull and Cost-Push Inflation6m
- Costs of Inflation: Shoe-leather Costs and Menu Costs4m
- 13. Productivity and Economic Growth1h 17m
- 14. The Financial System1h 37m
- 15. Income and Consumption52m
- 16. Deriving the Aggregate Expenditures Model1h 22m
- 17. Aggregate Demand and Aggregate Supply Analysis1h 18m
- 18. The Monetary System1h 1m
- The Functions of Money; The Kinds of Money8m
- Defining the Money Supply: M1 and M24m
- Required Reserves and the Deposit Multiplier8m
- Introduction to the Federal Reserve8m
- The Federal Reserve and the Money Supply11m
- History of the US Banking System9m
- The Financial Crisis of 2007-2009 (The Great Recession)10m
- 19. Monetary Policy1h 32m
- 20. Fiscal Policy1h 0m
- 21. Revisiting Inflation, Unemployment, and Policy46m
- 22. Balance of Payments30m
- 23. Exchange Rates1h 16m
- Exchange Rates: Introduction14m
- Exchange Rates: Nominal and Real13m
- Exchange Rates: Equilibrium6m
- Exchange Rates: Shifts in Supply and Demand11m
- Exchange Rates and Net Exports6m
- Exchange Rates: Fixed, Flexible, and Managed Float5m
- Exchange Rates: Purchasing Power Parity7m
- The Gold Standard4m
- The Bretton Woods System6m
- 24. Macroeconomic Schools of Thought40m
- 25. Dynamic AD/AS Model35m
- 26. Special Topics11m
3. Supply and Demand
Shifting Supply
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