FACTORS OF SUPPLY AND THEIR EFFECTS ON CURVE
Major Factors:-
l Prices of inputs;
l Technology;
l Number of suppliers.
(1). Prices Of input Goods
(a) A decrease in input prices.
(b) An increase in input prices.A Increase in input prices
à Production cost lowered
à Greater profit margin
à Willing to produce more
à Price depressed
An decrease in input prices à Production cost increased
à Profit margin squeezed
à Produced less
à Price increased
Example: “Runaway” production of Hollywood films
l devaluation of Canadian dollar and Australia dollar;
l decrease in prices of inputs in these places;
l increase in film and TV production by Hollywood studios;
“In Other Words If We Decrease The Price input Then The curve Shift toward right but if price input increase then curve shift toward left” just Like I shown In previous graphs……..
Second Factor: Technology:-
A change in technology may result in a more effective and efficient way of production of a product or provision of a service in two ways:
In other words we can say that technology is the source to shift the graph to word left or right
(A) Increase in technology.
(B) Decrease in technology.
(A) Increase In technology
à Production cost lowered
à Greater profit margin
à Willing to produce more
à Price depressed
(B) Decrease In Technologyà Production cost increased
à Profit margin squeezed
à Produced less
à Price increased
Example: Distribution of National Newspapers
“In the past, only geographically small countries could sustain national newspapers. Even New York Times, a prestigious newspaper, its circulation is mostly restricted in the East coast of USA. The reason: newspaper printing is done at a central plant and then the newspaper copies will be distributed to the market. The cost of transportation and time taken must be taken into account when you want to distribute the newspaper nationwide. The coming of new technology: Newspaper content can be sent to a number of places for printing and then distribution can be done at the same time.”
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