Theory of Supply — Part 2: Shifts and Elasticity of Supply: visual lesson, ISC Class 12 Economics

Lesson

Theory of Supply, Part 2

Part 2 — movement along versus shift of the supply curve, and elasticity of supply.

In this lesson you will

Distinguish extension and contraction from increase and decrease of supply
Calculate elasticity of supply by the percentage method
Identify the degree of elasticity of a straight supply line by the geometric method

Part 2 at a glance

Compare

Movement along the curve: only the own price changes.

Shift of the curve: another determinant changes.

Table distinguishing a movement along the supply curve (extension and contraction, caused by the own price) from a shift of the curve (increase and decrease, caused by other determinants)
	Movement along the curve	Shift of the curve
Cause	Change in the good's own price	Change in any other determinant
Upward / rightward	Extension: more at a higher price	Increase: more at every price
Downward / leftward	Contraction: less at a lower price	Decrease: less at every price
Diagram	Point moves on one curve	Whole curve moves to S2

Diagram

Imagined figures: a higher price, a larger quantity, the same curve.