10. As opposed to a shift in supply, the quantity supplied will be increased by:
  1. a fall in the cost of factors of production. A change in the cost of factors of production will change the entire supply relationship; in other words, it shifts the supply curve. Remember, the supply relationship is based on opportunity costs; and a change in production costs changes the opportunity costs of supplying the product in question.
  2. an increase in price. Since a supply curve is a graph representing the relationship between the price and the desired quantity supplied, an increase in the market price simply moves us to a point along that curve, where desired quantity supplied is greater.
  3. a fall in demand. A fall in demand will change the market equilibrium price to one that is lower, thereby reducing the desired quantity supplied.
  4. new firms entering the industry. The industry supply curve is simply the sum of the individual firm's supply curves. Therefore, the entry of new firms will shift out the supply curve, rather than move us along it.
  5. an increase in consumer's incomes for an inferior good. An increase in income caused demand to fall for an inferior good. A decrease in demand will change the market equilibrium price to one that is lower, thereby reducing the desired quantity supplied.

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