The price of leather has increased, which affects resource costs. This non-price determinant of supply caused the supply curve to shift left. This results in a higher price and a lower quantity of shoes.
What are the determinants of a shift in the supply curve?
Supply is not constant over time. It constantly increases or decreases. Whenever a change in supply occurs, the supply curve shifts left or right. There are a number of factors that cause a shift in the supply curve: input prices, number of sellers, technology, natural and social factors, and expectations.
For what reasons might the supply of leather rise?
The costs of producing leather fall. The profitability of producing alternative products decreases.
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