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Module 1: The competitive market system

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Shifts in the Supply Curve

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Economics - Shifts in the Supply Curve

Shifts in the Supply Curve

Factors that change supply and shift the supply curve include:

* A change in the cost of production. Lower costs, with other things
remaining the same, including price, will mean greater profits and so
increased supply.

* Technological change. New technology invariably means greater
productivity, lower unit costs and increased supply.

* Natural disasters. Floods, bushfires and earthquakes, to name a few,
have the potential to severely restrict the supply of certain goods and
services.

* Government action. Policies by the government, such as changes to
tariffs and subsidies, have

If the supply curve shifts to the right, it indicates an increase in
supply at each and every price. A decrease in supply is shown by the supply
curve shifting to the left.

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