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When we draw a supply curve, we again vary the price but hold everything else fixed. A change in any other factor will cause the market supply curve to shift. A leftward shift of the market supply curve for houses, as indicated in ***Figure 4.4 "A Shift in Supply of Houses", could be caused by many factors, including the following:
- Increases in the costs of production, such as wages, the cost of borrowing, or the price of oil
- Bad weather that delays or damages construction in process
- Changes in regulations that make it harder to build
Figure 4.4 Figure 4.4 A Shift in Supply of Houses
If there is a decrease in supply of houses, then fewer houses are supplied at each price. The supply curve shifts leftward.
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