#supply #economics

• Price of the Good or Service

  • A higher price usually encourages producers to supply more (movement along the supply curve).

• Costs of Production

  • Includes wages, raw materials, rent, etc.

  • If costs rise, supply decreases (supply curve shifts left).

• Technological Advances

  • Improved technology increases efficiency, reducing costs and increasing supply (shift right).

• Prices of Other Goods

  • If a producer can make more profit from another product, they may switch production, reducing supply of the original good.

• Expectations of Future Prices

  • If producers expect higher future prices, they might reduce current supply to sell later at a higher price.

• Government Policies

  • Taxes (e.g. indirect taxes like VAT): increase costs, reducing supply.

  • Subsidies: lower costs, increasing supply.

• Natural Factors / Disasters

  • Weather conditions, diseases, or natural disasters can reduce supply, especially in agriculture.

• Number of Producers in the Market

  • More producers = increased market supply.