Question

Does a change in producers’ technology lead to a movement along the supply curve or to a shift in the supply curve? Does a change in price lead to a movement along the supply curve or to a shift in the supply curve?

Answer 1

Ans:

1) Shift in the supply curve

The change in producers technology changes the production cost and increases the production efficiency.This will  shift the supply curve to the right.Hence changes that effect production cost and related factors will  shift the supply curve.

2) movement along the supply curve

There is a movement along the supply curve when the change in price of goods, changes the quantity supplied.Hence a movement along the supply curve occurs when a change in quantity supplied is caused only by a change in price.