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Question

Explain the distinction between "change in quantity supplied" and "change in supply". Use diagram.

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Solution



Change in Supply
Change in Quantity Supplied
MeaningWhen supply due to the change in all other variables other than the price of a good (i.e. price of the good remains same), then it is referred as change in supply.When supply changes due to change in the price of goods only, assuming other determinants remaining unchanged, then it is referred as change in quantity supplied.
FunctionsIt is represented as
Qx=f(¯Px,Py,Pi,T,G,GF,NF)

It is represented as
Qx=f(Px,¯Py,¯T,¯Pi,¯G,¯Gf,¯NF)
Shifts & MovementsIt results in a shift in the supply curve of the firm which can be rightwards or leftwards.
It results in a movement of the supply curve of the firm which can be upward or downward.
Types:The following are its types:
1) Increase in Supply
2) Decrease in Supply

The following are its types:
1) Expansion of Supply
2) Contraction of Supply
Diagram:(Ref. Image 1)(Ref. Image 2)

1270888_1424552_ans_8e0e99803a1443019ef97d294b4f9c20.png

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