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Question
Distinguish between Contraction of Supply and Decrease in Supply
Solution
| Contraction of Supply | Decrease in Supply |
| Contraction of supply refers to a fall in the quantity supplied, due to a fall in the price of a commodity, other factors remaining constant. | Decrease in supply refers to a fall in the supply of a given commodity due to unfavourable changes in other factors. |
| It is shown by a downward movement on the same supply curve. | It is shown by a shift in the supply curve from right to left. |
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