SHIFTS IN THE SUPPLY CURVE

The supply curve for ice cream shows how much ice cream producers offer for sale at any given price, holding constant all the other factors beyond price that influence producers’ decisions about how much to sell. This relationship can change over time, which represented by a shift in the supply curve. For example, suppose the price of sugar falls. Because sugar is an input into producing ice cream, the fall in the price of sugar makes selling ice cream more profitable. this raises the supply of ice cream. At any given price, sellers are now willing to produce a larger quantity. Thus, the supply curve for ice cream shifts to the right.

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