Shifts in supply refer to the changes in the quantity of a good or service that producers are willing and able to sell at various prices, caused by factors other than the good's price. This concept is crucial in understanding how market dynamics operate, especially when analyzing the balance between supply and demand in perfect competition. An outward shift indicates an increase in supply, often due to lower production costs or advancements in technology, while an inward shift signifies a decrease, reflecting higher costs or unfavorable conditions.
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