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Homework answers / question archive / Movements along versus shifts of supply curves Consider the market supply of peanut butter
Movements along versus shifts of supply curves
Consider the market supply of peanut butter.
Complete the following table by indicating whether an event will cause a movement along the supply curve for peanut butter or a shift of the supply curve for peanut butter, holding all else constant.
| Event | Movement Along | Shift |
| A decrease in the price of labor (used in the production of peanut butter) | ||
| An increase in the price of peanut butter | ||
| A decrease in the number of producers |
1 A decrease in the price of labor shifts the supply curve for peanut butter to the right because the price labor inputs are the cost of the input factor of production used in the production of the peanut butter. Therefore, any changes in the input cost shift the supply curve.
2. An increase in the price of peanut butter moves the economy along the supply curve to the up. As we know that the supply shows the relationship between the price and the quantity supplied. According to this, an increase in the price of the peanut butter increases the quantity supplied.
3. A decrease in the number of producers shifts the supply curve to the left because less number of seller means less quantity supplied at the existing price.
