In Economics, the “movement along the supply curve” and “shift in supply curve” represent very different market situations. These two terms define the change in supply due to a change in its factors.
Meaning of Supply Curve :
Supply Curve is a graphical representation of the correlation between the price of the commodity and quantity supplied for a given period of time.
This curve is affected by the change in quantity supplied. The movement along the supply curve and shift in the supply curve explains the change in the supply. When the supply of a commodity change due to changes in its price, it is shown by movement along the supply curve and shift in the supply curve shows the change in quantity supplied due changes in factors of supply other than its price.
Movement along Supply Curve :
It refers to a change along the supply curve. On the supply curve, a movement expresses a change in both price and quantity supplied from one point to another on the curve. Therefore, it can be said that movement along the supply curve represents the variation in quantity supplied of a commodity with a change in its price, assuming other factors constant.
As we know, the quantity supplied of a commodity change in with increase or decrease in its on price while other factors of supply remain unchanged. When we show this change on a graph, it is known as movement along the supply curve.
The movement along the supply curve can be classified as :
- Extension of Supply
- Contraction of Supply
Extension of Supply :
When the quantity supplied of a commodity increase with a rise in its price, it is known as an extension of supply, other things being equal.
This can be understood by the following illustration:
Suppose, the price of ice cream is Rs.10 and the quantity supplied is 5 units. When the price increases to Rs. 20, the supply extends to 10 units.
| Price of Ice Cream (in Rs.) | Quantity Supplied (in units) |
| 10 | 5 |
| 20 | 10 |
In Fig, X-axis shows the quantity and Y-axis shows the price. When the price is Rs10, the quantity supplied of ice cream is 5 units. As the price increases to Rs20, its supply also increases to 10 units. It implies the movement from a lower point to a higher point along the same supply curve, thus known as an extension of supply.
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