Question

With the help of a diagram define decrease in supply.

Answer 1

If quantity supplied of the commodity falls due to change in other factors, it is called decrease in supply.

Answer 2

When supply of a commodity falls due to factors other than the price of the commodity, it is called decrease in supply. Graphically, it implies a leftward shift of the supply curve of the commodity. In the figure, SS is the original supply curve. At OP price, OQ quantity is supplied. Now when supply decreases, SS curve shifts to S₁S₁. Quantity supplied decreases from OQ to OQ₁ at the same price of OP.