Shifting of demand and supply curve-

Shift in demand curve

The amount purchased of a commodity may change not only because of change in price but also
due to change in other factors like income, taste, price of other commodities, etc. When the
amount purchased of a commodity rises or falls because of change in factors other than the own
price of the commodity, it is called change/shift in demand.

1. Increase in demand
2. Decrease in demand

1. Increase in demand-
Increase in demand refers to a situation when the consumers buy larger amount of a
commodity at the same price because of change in factors other than the own price of the
commodity. Increase may be due to increase in income, change in taste of the
commodity, increase in population, etc. An increase in demand means that the entire
demand curve shifts to the right, indicating a larger amount purchased at every price.

2. Decrease in demand-
Decrease in demand refers to a situation when the consumers buy a smaller quantity of
the commodity at the same price. It takes place as a result of change in factors other than
the own price of the commodity. A decrease in demand means that the entire demand
curve shifts to the left, indicating a smaller amount purchased at every price.
Shift in supply curve-

When the amount supplied of a commodity increases or decreases because of change in factors
other than the own price of the commodity, it is called change/shift in supply. A change in
supply implies that a larger or smaller quantity will be supplied at the same price because of
change in other factors. The amount supplied of a commodity may change not because of any
change in the own price of the commodity but due to change in other factors like change in input
prices, change in prices of related commodities, etc.

1. Increase in supply
2. Decrease in supply

1. Increase in supply-
An increase in supply refers to a situation when the producers are willing to supply a
larger quantity of the commodity at the same price or same quantity at a lower price.
It may result from improvement in technologies, decrease in input prices, fall in prices of
related commodities, etc. An increase in supply means the entire supply curve shifts to
the right, indicating a larger amount offered at every price.
2. Decrease in supply-
A decrease in supply, on the other hand, refers to a situation when the producers are
willing to supply a similar quantity of the commodity at the same price or same quantity
at a higher price. A decrease in supply may result from increase in inputs costs, rise in
prices of related products, change in motivation of producers, etc.
A decrease in supply means that the entire supply curve shifts to the left, indicating a
smaller quantity offered for sale at any particular price.