ESSAY ECO

But. price of related goods. for shift in the supply curve occurs when there are changes in other factors such as technology.  Movement along the supply curve occurs when price of a product changes and other factors remain constant. policies. etc and price product remain constant. .0CT 2010 QUESTION 7 The differences between a movement along a demand curve and a shift in demand curve using diagrams is :  For a movement along the supply curve. Contrast with shift in supply curve where it change in supply. government. it change in quantity supply.

downward movement. price of a product falls. Movement along the supply curve move upward movement and downward movement. Example: from point b to point a. For upward movement price of product rises. then. Example: from point b to point c. the quantity supplied decreases. the quantity supplied increases. .

For shift in the supply curve. This increase in Supply (S1S2). it shift into supply curve shifts to right if : price of substitute goods decreases. increase in number of sellers and government provides subsidy to sellers. price of input decreases. price of complementary goods increases. expected future price decreases. .

price of complementary goods decreases. price of inputs increases. This decrease in Supply (S1S3). . expected future price increases. decrease in number of sellers. Government imposes tax on sellers.For supply curve shifts to the left if : price of substitute goods increases.

the foods make from wheat also increase example roti canai.  Example : when price of roti canai increase. people tend to switch to for the substitutes goods such as rice and reduce to purchase roti canai. Assume the price of wheat increases. . the. (a) Affect on demand for rice  Increase quantity demand for rice because its substitute goods.  When the price of wheat increase.OCT 2008 QUESTION 2 2.

 When the increase of wheat as a raw materials for roti canai automatically decrease quantity supply for canai. .  The quantity supply for roti canai will decrease and vice versa because the cost of production increase.(b) Affect on supply for roti canai.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.