The effects of supply shifts on producers' surplus

Gay Y. Miller, Joseph M. Rosenblatt, Leroy J. Hushak

Research output: Contribution to journalArticlepeer-review


Changes in the supply curve caused by technological improvements in production or Changes in national policy may or may not benefit producers as a whole, depending on the type of shift in the supply curve. A structured analysis of different changes in the supply curve that model this situation is given, and the change in producers' surplus is examined depending on quantitative aspects of the supply and demand curves. For supply and demand curves that are linear or power functions, a small downward pivot of the supply curve will increase producers' surplus only if the equilibrium point is far enough into the elastic region of the demand curve, and any downward pivot of the supply curve will decrease producers' surplus if the equilibrium point is in the inelastic region of the demand curve. Similar results are obtained for the more general case of convex supply and demand curves.

Original languageEnglish (US)
Pages (from-to)886-891
Number of pages6
JournalAmerican Journal of Agricultural Economics
Issue number4
StatePublished - Nov 1988
Externally publishedYes


  • Producer surplus
  • Supply curves
  • Welfare

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics


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