What causes a change in quantity supplied?

Economics Dec 13, 2020

Expert Solution

Change in quantity supplied

The upward or downward movement along a given supply curve is shown as change in quantity supplied. The only factor which causes change in quantity supplied is price. When the supply of a good increases as a result of an increase in its price, we say that there is an increase in quantity supplied and supply curve shifts upwards. The reverse happens when there is a fall in price of the goods.

Elasticity of the supply is determined by change in quantity supplied. The formula for measuring elasticity of supply is:

Es=Percentage change in quantity supplied/percentage change in price.

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