IBonomicsMovement Along the Supply CurveSL
MicroeconomicsA diagram showing movements along a supply curve caused by changes in the price of the good itself.
Curves and elements
- Supply curve
- Shows the positive relationship between price and quantity supplied.
- A
- The original position on the supply curve, at price PA and quantity QA.
- Extension in supply (A to C)
- A movement up the supply curve caused by a rise in price from PA to PC.
- Contraction in supply (A to B)
- A movement down the supply curve caused by a fall in price from PA to PB.
- Price change
- A change in the good’s own price causes movement along the supply curve rather than a shift of the curve.
Key explanations
- 1
A movement along the supply curve occurs when the good’s own price changes.
- 2
A rise in price from PA to PC causes an extension in supply, moving from point A to point C.
- 3
A fall in price from PA to PB causes a contraction in supply, moving from point A to point B.
- 4
Only price changes cause movement along the supply curve; non-price factors shift the whole supply curve.
Example exam question
Explain the difference between an extension and a contraction in supply, using a supply curve diagram.
Show example answer
An extension in supply occurs when price rises and quantity supplied increases, while a contraction in supply occurs when price falls and quantity supplied decreases, all things being equal.
