Which term describes a fall in supply at any given price, shifting the supply curve to the left?

Which term describes a fall in supply at any given price, shifting the supply curve to the left?

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

Answer: (B)

A fall in supply at every price means the whole supply curve shifts left. This is called a decrease in supply. It happens because non-price factors (like higher production costs, taxes, or worse weather) make producers willing or able to supply less than before, even if the price stays the same. This differs from a contraction in supply, which would be a movement along the same curve caused by a change in price itself; the quantity supplied changes at that price, but the curve doesn’t shift. An increase in supply would be a rightward shift, and a general “change in supply” is too vague to be precise about the direction.

A fall in supply at every price means the whole supply curve shifts left. This is called a decrease in supply. It happens because non-price factors (like higher production costs, taxes, or worse weather) make producers willing or able to supply less than before, even if the price stays the same.

This differs from a contraction in supply, which would be a movement along the same curve caused by a change in price itself; the quantity supplied changes at that price, but the curve doesn’t shift. An increase in supply would be a rightward shift, and a general “change in supply” is too vague to be precise about the direction.