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Question
With the help of a diagram, define an increase in supply.
Solution
When supply of a commodity rises due to factors other than the price of the commodity, it is called an increase in supply. This is shown in the diagram. In the figure, SS is the original supply curve. At price OP, the quantity supplied is OQ. Now when supply increases, the supply curve shifts to the right as S1S1. Producers are now willing to supply more, i.e., OQ1 at the same price as OP.
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