Summary
Highlights
The video begins by differentiating between a change in supply and a change in quantity supplied. Supply refers to the entire supply curve, where a change in supply means a shift of the entire curve (either to the right and down, or left and up). Quantity supplied, however, refers to a movement along a single supply curve due to a change in price.
The first example discusses a government-imposed price cap on gasoline. If the price cap is below the current market price, it causes a movement along the existing supply curve to a lower quantity supplied. This is a classic case of a change in quantity supplied, as the curve itself does not shift.
Next, the video explores the scenario where the price of refining gasoline increases. This increase in production cost affects all suppliers across the board, regardless of price. This would result in a change in supply, causing the entire supply curve to shift to the left and upwards, as suppliers would either demand a higher price for the same quantity or supply less at the same price.
Finally, the video considers a decrease in property tax for gas stations. This reduction in operating costs allows suppliers to either offer the same quantity at a lower price or supply more at the same price. This situation also leads to a change in supply, causing the entire supply curve to shift to the right and downwards.