Question

Glve two causes of Increase in supply ?

Answer 1

Answer:

There is many factor that cause increase in supply:

Explanation:

Increase in supply cause rightward shift in supply curve for Seller increases supply of good , whenever the cost of production falls.

1.Fall in the price inputs :Supply of commodity directly effects by the prices of inputs. There is negative relation between them. falling in the price of inputs leads to the falling in the cost of production which further leads to increase in the production(Supply)

2.Price of Other good: If there is any increase in the price of other good then supply of given good will fall . For example if seller selling two goods Momos and spring roll.and there is increase in the price of spring roll,It’s means spring roll is more profitable for seller then selling momos and in the effect of this seller will shifts factor of production from momos to spring roll and supply of our given good(Momos) will fall.

3.Taxation and Subsidy: If Govt provide any kind of subsidy to seller in the process of production then it will reduce the cost and supplier will produce more goods.

4.Technology Advancement : if Any upgradation in technology effect production process and increase productivity then supply will automatically increase. Most of the times technology upgradation decreases cost of production and increase the supply of good.

5.Price of own good : In laymen’s term if price of goods increase then their supply will also increase along with it means there is positive relation between price and good supplied.