Pearson Edexcel · A-Level · Economics B
Course version: 9EB0 · Version from Sept 2015
C) The distinction between movements along a supply curve and shifts of a…
Full specification wording
Supply: c) The distinction between movements along a supply curve and shifts of a supply curve
It is crucial to distinguish between a movement along a supply curve and a shift of the entire curve.
Checked against the Pearson Edexcel 9EB0 specification (opens in a new tab) on .
- Point 3 of 4
- 4 key terms
Study notes
From the checked teaching notes for this specification point.
The idea
It is crucial to distinguish between a movement along a supply curve and a shift of the entire curve. A movement along the supply curve is caused solely by a change in the price of the good itself, resulting in an extension (increase in quantity supplied) or contraction (decrease in quantity supplied). Conversely, a shift of the supply curve occurs when a non-price determinant of supply changes, such as production costs, technology, or government taxes and subsidies. For instance, an increase in the price of raw materials will shift the supply curve to the left, meaning less is supplied at every price, whereas a rise in the market price of the final product only causes an upward movement along the existing curve.
What earns the marks
- Identification that a change in the good's own price causes a movement along the supply curve.
- Identification that a change in non-price factors causes a shift of the entire supply curve.
- Use of the terms 'extension' and 'contraction' to describe movements along the curve.
- Understanding that a rightward shift represents an increase in supply, and a leftward shift represents a decrease in supply.
Common mistakes and how to put them right
Stating that a change in price shifts the supply curve.
Put it right: Price changes only cause movements along the existing curve.
Using the terms 'increase' or 'decrease' in supply when referring to a movement along the curve.
Put it right: These terms should be reserved for shifts, while 'extension' and 'contraction' apply to movements.
Shifting the curve up or down instead of left or right.
Put it right: Think of shifts as left (decrease) or right (increase) to avoid confusion with price changes.
Exam tips
- When analysing a scenario, first ask yourself if the change is to the price of the good itself; if not, it must be a shift.
- Clearly indicate the direction of a shift using arrows on your diagrams to ensure the examiner understands your analysis.
- Memorise the conditions of supply, such as changes in costs of production or technology, to quickly identify causes of a shift.
Try the lesson
The start of the Supply: c) The distinction between movements along a supply curve and shifts of a supply curve lesson, made from checked teaching notes for this specification point.
Have a go first
Which of the following would cause a movement along the supply curve for wheat, rather than a shift of the supply curve?
Listen
It is crucial to distinguish between a movement along a supply curve and a shift of the entire curve. A movement along the supply curve is caused solely by a change in the price of the good itself, resulting in an extension (increase in quantity supplied) or contraction (decrease in quantity supplied). Conversely, a shift of the supply curve occurs when a non-price determinant of supply changes, such as production costs, technology, or government taxes and subsidies. For instance, an increase in the price of raw materials will shift the supply curve to the left, meaning less is supplied at every price, whereas a rise in the market price of the final product only causes an upward movement along the existing curve. A strong answer earns marks for these points. Identification that a change in the good's own price causes a movement along the supply curve. Identification that a change in non-price factors causes a shift of the entire supply curve. Use of the terms 'extension' and 'contraction' to describe movements along the curve. Understanding that a rightward shift represents an increase in supply, and a leftward shift represents a decrease in supply. Exam tip: When analysing a scenario, first ask yourself if the change is to the price of the good itself; if not, it must be a shift.
See it
Key words
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Movement along a supply curve
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Shift of the supply curve
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Extension
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Contraction
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See every definition
- Movement along a supply curve
- Caused solely by a change in the price of the good itself, resulting in an extension or contraction of the quantity supplied.
- Shift of the supply curve
- Occurs when a non-price determinant of supply changes, such as production costs, technology, or government taxes and subsidies.
- Extension
- An increase in quantity supplied caused by a change in the price of the good itself, shown as a movement along the supply curve.
- Contraction
- A decrease in quantity supplied caused by a change in the price of the good itself, shown as a movement along the supply curve.
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