Movement Along A Supply Curve
Movement along a supply curve is caused by change in price factors. Other things remaining the same, the quantity supply of a commodity changes with the change in its price which is called movement along a supply curve. In this case, seller moves from one point to another point in same supply cuve i.e. no new supply curve is drawn. There are two types of movement along a supply curve . They are :
I)Extension in Supply :
Other things remaining the same , when the quantity supply of a commodity increases with rise in price, it is called extension in supply. In this case, the seller moves upward along the same supply curve which is shown in the figure below:
In the above figure, the upward slopping straight line SS represents a supply curve. In which, initially a seller is at point 'a' when he supplies Q1 quantity at P1 price . When price increases from P1 to P2, quantity supplied also increases from Q1 to Q2 and seller reaches the point 'b', which shows the upward movement along the same supply curve.
II) Contraction in Supply :
Other things remaining the same , when the quantity supplied of a commodity decreases with the fall in its price, it is called contraction in supply. In this case, the seller moves downward from one point to another the along the same supply curve as shown in the figure below :
In the above figure, initially the seller is at point 'a' where he supplies Q2 quantity at P2 price . When price falls from P2 to P1, the quantity supplied also decreases from Q2 to Q1 and seller reaches the point 'b', which shows the downward movement along the same supply curve.
Chapter 2 Part 15
