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Demand Demand-Supply-SupplyShift.gif pg-3
Shift Back or Decrease in Supply

To the right, we show a decrease, or shift back, in supply. The supply curve representing reduced supply is "higher" than the original curve representing greater supply. For this reason we usually write that supply has shifted "back," or "back and to the left," or "to the left" rather than "up."

When supply is given by S1 and the market price is 12, 27 units are supplied, but after supply shifts back to S2, the same price leads to a supply of 9 units. When the market price is 16, if supply is given by S1, 36 units are supplied, but when supply falls to S2, only 18 units are supplied.

Supply curve S1 can be written as:

QS1 = (2.25)*P

Supply curve S2 can be written as:

QS2 = (2.25)*(P-8)
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