A Change in the Quantity Supplied Versus a Change in Supply
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The quantity supplied
of a good or service is the amount that producers plan to sell during a given time period at a particular price.
Price is just one of the factors that affect producers' supply decisions. The supply curve isolates the impact of price on the quantity of a product supplied and assumes that all other factors stay the same.
- A change in quantity supplied is caused by a price change ONLY. It is a movement along the same supply curve.
- When one of the other factors that influence selling plans changes, there is a change in supply and a shift of the supply curve.
A tax will shift the supply curve up by the amount of the tax.
At every price level, less is supplied. For example, at price P0
, originally Q0
is supplied. After the tax, Q1
is supplied at price P0