To develop your understanding of how changes in the physical environment can alter supply, move your mouse pointer over each diagram. This really is a very simple concept and you shouldn’t have much difficulty with it.

If the physical environment changes in such a way that it makes it harder for a business to produce its goods and services, then supply will fall. At each market price, less will be produced: the supply curve shifts to the left.

If the physical environment changes in such a way that it makes it easier for a business to produce its goods and services, then supply will increase. At each market price, more will be produced: the supply curve shifts to the right.