A fall in supply at any given price, due to non-price factors, is described by which term?

A fall in supply at any given price, due to non-price factors, is described by which term?

• A. Increase in Supply
• B. Decrease in Supply
• C. Change in Supply
• D. Extension in Supply

Answer: (B)

When non-price factors affect producers, the overall willingness to supply at every price can change, not just reflect a price change. If the quantity supplied falls at every price, the entire supply curve shifts to the left. This is called a decrease in supply. It’s different from a movement along the curve (extension or contraction in supply) which happens when the price itself changes. A decrease in supply occurs because factors like higher production costs, new taxes, or worse technology make producing goods less attractive, so at each price firms supply less. Increase in supply would shift the curve to the right, while a general change in supply is just the idea that the curve has moved, with the exact direction specified by the factors involved.

When non-price factors affect producers, the overall willingness to supply at every price can change, not just reflect a price change. If the quantity supplied falls at every price, the entire supply curve shifts to the left. This is called a decrease in supply. It’s different from a movement along the curve (extension or contraction in supply) which happens when the price itself changes. A decrease in supply occurs because factors like higher production costs, new taxes, or worse technology make producing goods less attractive, so at each price firms supply less. Increase in supply would shift the curve to the right, while a general change in supply is just the idea that the curve has moved, with the exact direction specified by the factors involved.