explain any two factors affecting the supply of a commodity other than price we
Answers
Some of the factors thal affect the supply of the commodity are:
1. Price-One of the most important factor affecting the supply of a commodity Is
price. Price ls directly releted to the supply of a commodity. At higher prices the
supply of a commodity Increasas. This inereases the profiability of the producer.
2. The supply of a product not only depends on its price but also price ot other goods
The increase in price of the other good is more profiable the producer will shift
produetion and increase the supply of that good.
3. Inputs (Factors of Productlon)- With an increase In cost of production the firm Is
likely to reduce the supply of the product as it is less profiteble for him.
4. kmproved technology- Advanced technology reduces the cost of production and
therefore is more profitable for the producers and thereby induces them to inerease
supply of goods.
5. Government pollclesa- This is another important factor. Increase in governement
taxes increases the cost to producers and this in turn makes them reduce the supply
of their goods and charge higher prlces to consumers.