There are two types of Change in Supply

• a)      Extension and Contraction

• b)      Rise and Fall in Supply

Extension and Contraction

Extension and Contraction of Supply occurs due to change in the price of respective commodity.

Extension means that there is increase in Supply due to fall in price

Contraction means that there is decrease in Supply due to rise in price

Rise and Fall in Supply

Rise in Supply refers to

Rise in Supply even the price remains same.

No change in Supply with the fall in Price

Fall in Supply refers to

Fall in Supply even the price remains same.

No change in Supply with the increase in Price

Causes of Rise and fall in Supply

• Changes in Cost of Production
• Changes Taxation
• Development of Transport and communication System
• Development of Technology
• Law and order Situation