Shifts in supply
Shifts in supply occurs when the
supply curve moves either to the left or the right therefore increasing or decreasing
the quantity supplied at the same price level. Things that causes the supply
curve to shift to either one direction is when a new technology or product renders
the item obsolete or is less useful therefore it shifts away the willingness
of consumers from that old item to the new one. Sellers would add more supply
or increase the inventory for that new good in their stores if more people are
buying it. Besides, sellers would always want to sell more of a good that sells
well and fast so that their revenue per a specified time horizon is greater.
The result is a decreasing inventory or supply for that old item and a decrease
in price because sellers would want to clear out their inventory for that old
one to buy more of that new technology or product.
That scenario would also trigger the number of sellers in general willing to
supply that old good. If the business is all about competition, they would want
to win as much buyers as they can so selling a good that no longer sells well
would be a bad idea. When it ripples across a group of sellers, the quantity
supplied for that old good would diminish overall and the supply for the new
item would be increased due to demand from consumers.