Real-world Example One: A Decrease in Supply
- In 2023, the supply of UK-grown tomatoes declined as a consequence of rising energy costs
- Energy prices increased due to supply chain issues, causing the cost of operating greenhouses to rise
Diagram: Supply of UK Tomatoes
A fall in supply of tomatoes shifts supply curve to the left
Diagram analysis
- An increase in the costs of production from imported energy results in a shift left of the entire supply curve from S1 → S2
- The price remains the same at P1
- The quantity supplied falls from Q1 → Q2
