Advertisements
Advertisements
Question
Explain three factors causing a shift of the supply curve.
Solution
- Technology: As technology advances, the cost of production decreases. As a result, the supply curve moves to the right. On the other side, if outdated and subpar technology is used in manufacturing. As production costs rise, supply will drop.
- Number of Firms: The more firms there are, the larger the market supply at the same price. If the number of enterprises falls, the market supply of the product will diminish.
- Price of inputs: If input prices fall, the cost of production falls, resulting in an increase in supply. In contrast, an increase in input costs will raise the cost of production, reducing market supply.
APPEARS IN
RELATED QUESTIONS
Increase or decrease in supply means ______.
If the government of India levies excise duty on sugar, in which direction will the supply of sugar shift?
Explain three determinants of a leftward shift of the supply curve.
Define a decrease in supply.
With the help of a diagram, explain the meaning of a decrease in supply.
What causes a downward movement along a supply curve?
What is meant by 'increase' in supply?
If a farmer grows rice and wheat, how will a decrease in the price of wheat affect the supply curve of rice?
How does an decrease in price of an input affect the supply curve of a firm?
What effect does increased input prices have on the supply curve of a commodity? Draw a diagram to explain your answer.
