Change In Supply

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DEFINITION of 'Change In Supply'

A term used in economics to describe when the suppliers of a given good or service have altered their production or output. A change in supply can be brought on by new technologies, making production more efficient and less expensive, or by a change in the number of competitors in the market.

BREAKING DOWN 'Change In Supply'

A change in supply will lead to a shift in the supply curve, which will cause an imbalance in the market that is corrected by changing prices and demand. If the change in supply increases supply, you will see the supply curve shift to the right, while a decrease in supply from a change in supply will shift the supply curve left.

For example, if there is a new technology that makes the production of DVD players a lot cheaper, according to the law of supply, there will be an increase in the output of DVD players. With more outputs in the market, the price of DVD players will likely fall, creating greater demand in the marketplace and more overall sales of DVD players.

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