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Question

If there is change in any other determinant of supply (other than own price of the concerned commodity), the supply curve must shift to the right or left. Do you agree? Give reason.

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Solution

Yes. Shift in the supply curve occurs due to factors other than own price of the concerned commodity. The supply curve shifts to the right when (own price of the commodity remaining constant), there is, for example, a fall in the cost of production due to new technology. The supply curve shifts to the left when (own price of the commodity remaining constant), there is , for example, an increase in the cost of production due to higher taxes.

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