Supply Shift Left (Decrease in Supply)

What this diagram shows

A leftward shift in supply occurs when producers are willing and able to supply less of a good at every price level. This shift results in a higher equilibrium price and lower equilibrium quantity in the market. The shift represents a fundamental change in supply conditions, not a movement along the existing supply curve. Understanding supply shifts is crucial for analysing how market disruptions affect prices and quantities traded.

Key points

• The entire supply curve shifts left/upward, showing decreased supply at all price levels
• Equilibrium moves from the original point to a new point with higher price and lower quantity
• Caused by factors like increased production costs, reduced technology, fewer suppliers, or adverse government policies
• Results in market disequilibrium temporarily before settling at the new equilibrium point
• The extent of price rise and quantity fall depends on the price elasticity of demand

Exam board notes

All major exam boards treat this diagram identically, focusing on the same key concepts of supply shifts, equilibrium changes, and underlying causes. The terminology and analytical approach remain consistent across AQA, Edexcel, OCR and CIE specifications.