Cost savings. A technological breakthrough lets every aspirin factory produce more cheaply, shifting supply out to the right from S₀ to S₁. With highly inelastic demand, as in (a), the equilibrium moves from E₀ to E₁ with a substantially lower price and little change in quantity. With highly elastic demand, as in (b), the same shift brings a much greater quantity at very close to the original price. Consumers gain more from a cost saving when demand is inelastic, because it shows up as a lower price.
Higher costs. Push the shift the other way, as a higher cigarette tax does, and supply moves left. With inelastic demand, as in (a), companies can pass the cost increase along as a higher price with little fall in quantity. With elastic demand, as in (b), the shift mostly reduces the quantity sold. The slider sets the shift; a negative value gives the book's figure 5.9.