Question

Distinguish between expansion of supply and increase in supply.

Distinguish between increase in supply and extension of supply. Explain with the help of diagrams.

Answer 1

	Basis	Expansion in Supply	Increase in Supply
(i)	Meaning	When a larger quantity is supplied at a higher price, it is called expansion in supply or increase in quantity supplied.	When a larger quantity is supplied at the same price, it is called an increase in supply.
(ii)	Cause	It is due to a rise in the commodity's own price, with other factors remaining unchanged.	It results from changes in factors other than commodity’s own price, such as fall in factor prices, fall in prices of other goods improvement in technology, etc.
(iii)	Effect on supply curve	It leads to upward movement along a supply curve.	It results in rightward shift of supply curve.
(iv)	Diagram