Factors Affecting Supply
Shift in Supply Due to Production-Cost Increase
We know that a supply curve shows the minimum price a firm will accept to produce a given quantity of output. What happens to the supply curve when the cost of production goes up? Following is an example of a shift in supply due to an increase in production cost.
Figure 3. Delivery Options. Since this is not a realistic option for pizza suppliers, what happens to the supply curve when production costs increase?