Explain
State
any four determinants of supply.
Answers
Answer:
- Supply
Production is the process of turning inputs of scarce resources into an output of goods or services. The role of a firm is to organise scarce resources to satisfy consumer demand in a profitable way. Supply is defined as the willingness and ability of firms to produce a given quantity of output in a given period of time, or at a given point in time, and take it to market. Not all output is taken to market, and some output may be stored and released onto the market in the future.
Supply can be measured for a single factor of production, for a single firm, for an industry and for the whole economy.
- Price
The price of the product is the starting point in building a model of supply. The supply model assumes that price and quantity supplied are directly related.
- Non-price factors
As well as price, there are several other underlying non-price determinants of supply, including:
- The availability of factors of production
The availability of factors of production, such as labour or raw materials, can affect the amount that can be produced and supplied. For example, if a firm producing motor vehicles experiences a shortage of steel for its body panels, then its ability to produce vehicles will be reduced.
Answer:
changes in non-price factors that will cause an entire supply curve to shift (increasing or decreasing market supply); these include 1) the number of sellers in a market, 2) the level of technology used in a good's production, 3) the prices of inputs used to produce a good, 4) the amount of government regulation,
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